Don't Be Surprised, Bank Indonesia Calls Inflation Can Be Above 6 Percent At The End Of The Year

Illustration (Photo: Doc. Ministry of Finance)

JAKARTA - The monetary authority of Bank Indonesia (BI) stated that the inflation rate will continue to move up until the end of the year. This was conveyed directly by BI Governor Perry Warjiyo after the Board of Governors' Meeting (RDG) today.

According to him, there are various factors that underlie this projection. One of the basic indicators is the increase in subsidized fuel prices (BBM) which triggers an increase in the value of various other commodities.

"And therefore, by the end of this year inflation based on the consumer price index (IHK) will be slightly higher than 6 percent (year on year/yoy)," he said on Thursday, September 22.

For information, this level is very far from the target targeted by BI and the government of 3 percent plus minus 1 percent.

Furthermore, Perry explained that the downward trend will begin in 2023 and will return to the normal range below 4 percent in the second semester of 2023.

But after those months the increase in inflation will not be big and will be even more sloping. We estimate inflation will return to a maximum limit of 4 percent in the third quarter of 2023," he said.

VOI noted that this year's inflation level had reached its peak in July when it was at 4.94 percent. This figure then shrunk to 4.69 percent in August thanks to a number of control programs carried out by the central bank together with the government.