Predicting The Inflation Will Continue To Rise This Year, Bank Indonesia: We Are Aware!

Illustration (Photo: Doc. Antara)

JAKARTA - Bank Indonesia (BI) is said to continue to carry out strategic mitigation efforts to keep the inflation rate under control within the target range of 3 percent plus minus 1 percent.

BI Governor Perry Warjiyo said that domestic inflation was rising due to high supply-side pressure in line with rising world commodity prices.

"Core inflation was maintained at 2.58 percent year on year (yoy) amid increasing domestic demand and the consistency of Bank Indonesia policies in maintaining inflation expectations," he said during a press conference after the Board of Governors Meeting (RDG) on Thursday, June 23.

According to Perry, inflation in the volatile food category increased mainly due to rising global food prices and supply disruptions due to weather. Meanwhile, inflation in the administered prices category also remained high, influenced by inflation in air transport and energy.

"Going forward, inflationary pressures for the CPI (consumer price index) will increase, driven by rising global food and energy prices," he said.

Perry added that the CPI inflation rate in 2022 is estimated to be slightly higher than the upper limit of the target or more than 4 percent.

"Bank Indonesia continues to be vigilant about future inflationary pressures and their impact on inflation expectations, as well as adopting a policy of adjusting interest rates if there are signs of an increase in core inflation," he said.

"Bank Indonesia also continues to strengthen policy coordination with the Government through the Central and Regional Inflation Control Teams (TPIP and TPID)," concluded BI Governor Perry Warjiyo.