Mr. Perry Must Be Happy, BPS Has Good News For BI

Governor of Bank Indonesia Perry Warjiyo (Photo: Doc. Antara)

JAKARTA The Central Statistics Agency (BPS) today reported that inflation based on the consumer price index (IHK) was 4.97 percent year on year (yoy) in March 2023, lower than February 2023 which was 5.47 percent yoy.

Deputy for Distribution and Services Statistics, BPS Pudji Ismartini, said similar conditions also occurred in the core inflation component.

"The core inflation decreased from 3.09 percent in February to 2.94 percent in March 2023," he said when delivering an explanation to the media crew on Monday, April 3.

The decline in general inflation (JCI) and core inflation is good news in itself. The reason is, the influence of price inflation regulated by the government (administered price) on cigarette and fuel products is still quite strong.

Not to mention the volatile price inflation (volatile) which increases every Ramadan period and Eid al-Fitr arrives.

"The pressure on the core component inflation on an annual basis continues to decline during 2023," said Pudji.

To note, the inflation rate is one of the main points of Bank Indonesia (BI) in determining the policy of the benchmark interest rate. BI usually uses core inflation because it directly reflects the demand and supply that exist in the community.

The Governor of BI is optimistic that the level of domestic inflation will be more controlled after previously soaring due to rising commodity prices at the end of last year.

"Bank Indonesia set a target for core inflation of 3 percent plus minus 1 percent in the first semester of 2023 and IHK inflation of 3 percent plus minus 1 percent in the second semester of 2023," Perry said some time ago.

For this sloping inflation, the central bank no longer needs to increase the BI rate, which is now perched at the level of 5.75 percent.

"So, from the basic consideration of core inflation and IHK inflation, our statement at the BI level of 5.75 percent is sufficient," he said.