JAKARTA - Annual inflation at the end of 2023 is predicted to reach 3.6 percent. This prediction is still on the radar of the Bank Indonesia (BI) target of 2 to 4 percent.
This prediction was expressed by Bank Mandiri economist Faisal Rachman. The inflation rate is expected to start sloping in the second half of 2023.
"We continue to see that annual inflation will remain above the Bank Indonesia (BI) target range of 2 to 4 percent, at least until the first half of 2023, ranging from 4 to 6 percent," he said, quoting Antara, Wednesday, March 1.
According to him, inflation which was still high in the first half of 2023 was caused by low commodity prices in the first half of 2022.
Inflation can also be suppressed as the impact of the second round of subsidized fuel price adjustments last year on prices of other goods and services has decreased faster than previously estimated.
Global energy and food prices that are in a downward trend also support the downward trend in inflation.
"Thus, we remain of the view that annual inflation will continue to decline in the future, except for the period March to April 2023 due to the seasonal factors of Ramadan and the celebration of Eid al-Fitr," he said.
Previously, the Central Statistics Agency (BPS) announced that inflation on an annual basis in February 2023 reached 5.47 percent.
Core inflation was recorded at 3.09 percent on an annual basis or lower than 3.27 percent in January 2023.
"We continue to observe factors that can fundamentally affect core inflation, and see that it is too early to conclude that demand is already in a downward trend. On a monthly basis, core inflation is still rising by 0.08 percent," he said.
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