Bank Indonesia Concerning Inflation Reduction: Lower Than Initial Estimate

Bank Indonesia. (Photo: Doc. Antara)

JAKARTA - Bank Indonesia (BI) has issued an official statement regarding the inflation rate based on the consumer price index (CPI) which decreased last October to 5.71 percent on an annual basis (year on year/yoy).

Head of the BI Communications Department Erwin Haryono said the score was lower than September which was still perched at around 5.95 percent.

"The realization of inflation that was lower than the initial forecast was in line with the impact of the fuel price adjustment on the increase in volatile food inflation and inflation in the administered prices group, which was not as high as the initial forecast", he said in a written statement quoted on Wednesday, November 2.

In terms of core inflation, Erwin ensured that the latest reading at the level of 3.31 percent yoy was still under control even though it was an increase from September's 3.21 percent.

"Core inflation has been kept low in line with the lower propagation impact of the fuel price adjustment and the lack of strong inflationary pressure from the demand side", he said.

Erwin explained that the decline in CPI inflation was in line with the closer policy synergy between the central and regional governments, Bank Indonesia, and various other strategic partners through the Central and Regional Inflation Control Team (TPIP-TPID) and the National Movement for Food Inflation Control (GNPIP).

"We will continue to control the impact of further fuel price adjustments. For this reason, Bank Indonesia expresses its appreciation to all policy makers who jointly maintain price stability to support people's purchasing power and encourage economic recovery", he stressed.

As for the entire 2022 period, the central bank views inflation will be lower than the initial forecast, although it is still above the 3 percent plus minus 1 percent target.

"Policy synergy between the central and regional governments with Bank Indonesia will continue to be strengthened to ensure that inflation returns to the set target immediately", Erwin concluded.