Bank Mandiri Economists Predict Inflation January 2023 At 0.42 Percent

The President of the Republic of Indonesia, Joko Widodo. (Photo: Doc. Antara)

JAKARTA - Bank Mandiri economist Faisal Rachman estimates inflation will reach 0.42 percent on a monthly basis or month to month (mtm) in January 2023.

This inflation decreased compared to inflation in December 2022 amid the Christmas and New Year's momentum which reached 0.66 percent.

"Food inflation is suspected to be the main contributor to inflation, amid rising rice prices and several horticultural crops, especially since gold prices have been observed to rise amid the increasing risk of global economic slowdown," he said in an official statement, quoted from Antara, Saturday, January 28.

Commodities that are expected to be able to suppress inflation are fuel prices due to the decline in Pertamax prices, and air transport rates that tend to fall.

Annual inflation has also decreased, he said, indicating the impact of the second round of global inflation which continues to gradually decrease, which is 5.36 percent on an annual basis in January 2023, down from 5.51 percent in December 2022.

He estimates that inflation will return to the Bank Indonesia (BI) target of around 2 to 4 percent on an annual basis starting in the second semester of 2023.

In the first quarter of 2023, the inflation rate is estimated to be still above the government's target of reaching 4 to 6 percent year on year.

"This will range from 4 to 6 percent year on year in the first half of 2023 before falling to the target range in the second half amid low base effects in the first quarter of 2022," he said.

Inflation will completely decrease in the second semester of 2023 and is expected to be around 3.60 percent on an annual basis by the end of 2023.