5.95 Percent Inflation Sudah Terembus, BI Say Masih Akan Meningkat: Akibat Second Round Effect

Illustration (Photo: Doc. Ministry of Finance)

JAKARTA - The monetary authority of Bank Indonesia delivered an official statement regarding the amount of inflation which continued to experience an increasing trend until the close of last month.

According to the Head of the BI Communications Department, Erwin Haryono, inflation mainly comes from increasing the price group of goods regulated by the government or administrative prices.

"Increasing oil prices (BBM) contributed to the formation of inflation amid a decrease in core inflation and deflation in volatile food groups," he said in a written statement quoted on Tuesday, October 4.

It is known that the inflation rate based on the consumer price index (IHK) last September was 5.95 percent year on year (yoy). This level is much higher than August which was 4.69 percent.

Meanwhile, core inflation was also recorded to have increased to 3.21 percent yoy from the previous 3.04 percent in August.

Likewise with the volatile food group in September 2022 which increased to 9.02 percent yoy, higher than inflation in the previous month which was recorded at 8.93 percent.

The advance price group is also the same, namely inflation 13.28 percent yoy, stronger than inflation in the previous month which was 6.84 percent.

"In the future, IHK's inflationary pressures are expected to increase, due to the continued impact (second round effect) of subsidized fuel oil (BBM) price adjustments, increasing inflationary pressures in terms of demand and still high global energy and food prices," he said.

Erwin added that these developments are estimated to encourage inflation for the 2022 period to exceed the upper limit of the target of 3 percent plus minus 1 percent.

"Therefore, stronger policy synergy is needed between the central and regional governments and Bank Indonesia both in terms of supply and supply to ensure inflation returns to its target in the second half of 2023," said Erwin.

The monetary authority is said to continue to strengthen policy coordination with the central government, regional governments, and strategic partners in the Central and Regional Inflation Control Team (TPIP and TPID).

"We continue to maintain it through increasing the effectiveness of the implementation of the National Movement for Food Inflation Control (GNPIP) in various regions to maintain price stability and food security," he concluded.