Duarr! BI Predicts Inflation Will Explode To 4.6 Percent By The End Of The Year

Illustration (Photo: Doc. Ministry of Finance)

JAKARTA – Bad news came from Bank Indonesia (BI) in the middle of this week. The monetary authority estimates that the inflation level, which has now exceeded the government's target, is believed to continue to climb.

BI Governor Perry Warjiyo revealed this to reporters after holding a Board of Governors Meeting (RDG) in his office.

“Indeed, the CPI (consumer price index) will rise. Until the end of this year, it can reach 4.5 percent to 4.6 percent,” he said through a virtual channel on Thursday, July 21.

In VOI's note, the inflation rate that exceeded the maximum limit was first predicted by the central bank some time ago.

At that time, BI Governor Perry Warjiyo had stated that the inflation movement would be above the government's target in the middle of the year.

"Indeed, overall, we estimate that inflation may be slightly above 4 percent," he said on Tuesday, May 24.

Sure enough, the Central Statistics Agency (BPS) report on Friday, July 1 stated that Indonesia experienced inflation of 4.35 percent on an annual basis or year on year (yoy) in June 2022.

This figure is higher than the target of 3 percent plus minus 1 percent as stated in the 2022 State Budget Law.

However, Perry is still confident that domestic inflation can be maintained considering that the core inflation level is still on a stable trend.

“Core inflation has not yet reached 4 percent. In this situation, we have taken preventive measures to mitigate the risk of rising inflation going forward,” he said.

"The methods are such as controlling the rupiah exchange rate, conducting monetary operations through the money market interest rate structure for tenors of more than one week which is moving upwards, and selling SBN (state securities) in the secondary market which is part of strengthening monetary operations," closed BI Governor Perry Warjiyo.