JAKARTA - Bank Mandiri economist Faisal Rachman estimates monthly inflation will reach 0.29 percent in March 2023, an increase compared to the previous month's 0.16 percent, driven by the momentum of Ramadan.
"This is mainly due to the increase in food prices in line with the strengthening of food demand during the fasting month. Meanwhile, food supply is considered sufficient but prone to limited harvest in the midst of harvest periods that have not reached their peak and extreme weather," he said in an official statement, quoted from Antara, Thursday, March 30.
The price of Pertamax fuel, which rose by Rp500 per liter on March 23, 2023, and the price of transportation services, especially air transportation rates, which also rose a month before Lebaran homecoming, contributed to monthly inflation in March 2023.
Historically, monthly inflation increased by 0.5 to 0.7 percent during the Ramadan and Lebaran periods, with food contributions of around 0.4 to 0.5 percentage points and transportation services contributing around 0.2 to 0.3 percentage points
"The price of gold has also increased, following increased uncertainty in the global financial market after the Silicon Valley Bank (SVB), Silvergate Bank, and Signature Bank in the US which increases the risk of a spillover effect on the global banking system," he said.
Considering the first three months of this year, year-to-date inflation in March 2023 is estimated at 0.79 percent, a decrease compared to the same period last year of 1.20 percent.
Along with that, annual inflation is also expected to ease due to inflationary factors in the same month last year that were high.
He estimates annual inflation will reach 5.09 percent by March 2023 or lower than 5.47 percent last year.
"In March 2022, food and energy prices surged amid the Russian-Ukraine war, and the lifting of the upper limit on the highest retail price (HET) of cooking oil by Indonesia," he said.
The annual inflation is expected to remain in the range of 4 to 6 percent in the first half of 2023 before decreasing and returning to the government's target of 2 to 4 percent in the second half of the low base effect from the first half of 2022.
The impact of the second round of the increase in subsidized fuel prices in September 2022 will also appear to disappear completely in the second half of 2023.
"Therefore, we maintain our inflation estimates at around 3.60 percent by the end of 2023," he said.
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