Manulife Predicts Indonesia's Inflation Will Reach 4.4 To 4.8 Percent This Year

Illustration. (Photo: Doc. Antara)

JAKARTA - PT Manulife Aset Manajemen Indonesia (MAMI) Chief Economist & Investment Strategist Katarina Setiawan predicts Indonesia's inflation will reach 4.4 percent to 4.8 percent this year.

"It is indeed higher than usual, but in comparison to other countries and the condition of Indonesia a decade ago, for example in 2013 which reached 8 percent, the inflation condition is much better," he said, quoted from Antara, Wednesday, May 11.

Katarina said the prediction was based on whether prices controlled by the government or administered prices such as fuel oil (BBM), basic electricity tariffs (TDL), and gas prices continued to rise.

According to him, although the forecast tends to be higher than usual, it is still better than other countries, and the experience of inflation realization in 2013, which reached 8 percent.

Katarina admitted that she is optimistic that Indonesia's inflation will remain under control in line with efforts to realize solid macroeconomic fundamentals through the synergy and readiness of the government and the central bank.

"We are optimistic that Indonesia's inflation will remain under control," she said.

Moreover, Bank Indonesia also stated that it would not be in a hurry to raise interest rates due to rising inflation and would prioritize other approaches, such as increasing the statutory reserve requirement (GWM).

Bank Indonesia will monitor core inflation and will not raise interest rates based on the instant impact of increases in administered prices.

Based on Bank Indonesia's commitment, MAMI also estimates that there will be two to three times BI interest rate hikes, which will reach 4 percent to 4.25 percent by the end of 2022.