BI Optimistic Inflation 2025 Stays Controlled

Bank Indonesia (Photo: Antara)

JAKARTA - Bank Indonesia (BI) believes inflation will remain under control in the 2.5 percent target range plus minus 1 percent by 2025-2026.

Executive Director of the BI Communication Department, Ramdan Denny Prakoso, said that the 2024 Consumer Price Index (JCI) was maintained in the target range of 2.5 percent plus minus 1 percent.

Meanwhile, based on the Central Statistics Agency, the IHK inflation in December 2024 was 0.44 percent (mtm) so that the 2024 IHK inflation year-on-year became 1.57 percent (yoy).

According to Denny, the development of inflation in 2024 is lower than inflation in 2023 which is 2.61 percent (yoy).

"Inflation maintained in the target range is the result of the consistency of monetary policy, as well as the close synergy of inflation control between Bank Indonesia and the Government (Center and Region) in the Central and Regional Inflation Control Team (TPIP and TPID) through the National Movement for Food Inflation Control (GNPIP) in various regions," he said in his statement, Friday, January 3.

In the future, Denny said that Bank Indonesia believes inflation will remain under control in the 2.5 plus 1 percent target range in 2025-2026.

Denny conveyed that the monthly IHK inflation in December 2024 increased compared to November 2024 inflation of 0.30 percent (mtm).

"The increase in inflation was mainly contributed by volatile food groups, while core inflation was recorded to be stable and administrative price inflation decreased," he explained.

Denny explained that the core group inflation was recorded at 0.17 percent (mtm), stable from inflation the previous month, with inflation recorded in gold jewelery, cooking oil, and powdered coffee commodities.

Meanwhile, volatile food group inflation increased to 2.04 percent (mtm), from the previous 1.07 percent (mtm) in November 2024, mainly contributed by broiler eggs, various chilies, and various onions in line with the increase in demand for Christmas and New Year's National Religious Holidays.

Meanwhile, administrative prices were recorded at 0.03 percent (mtm), a decrease from the previous month's inflation of 0.12 percent (mtm).

On an annual basis, Denny said that IHK 2024 inflation is in the range of targets supported by the maintenance of various inflationary components.

Denny explained that the core inflation was maintained low by 2.26 percent (yoy), in line with inflation expectations that were hit in the target, the economic capacity was still large and could respond to domestic demand, controlled imported inflation in line with the policy of stabilizing the Rupiah exchange rate of Bank Indonesia, and the positive impact of developing digitalization.

"Platile food inflation is maintained low by 0.12 percent (yoy) supported by food production improvement and close synergy between Bank Indonesia and TPIP and TPID through GNPIP in various regions," he explained.

Meanwhile, Denny said that the administrative price group inflation was recorded at 0.56 percent (yoy), in line with the limited price adjustment policies regulated by the Government.