Economist Predicts Indonesia's Inflation To Be In The Position Of 5.25 Percent By The End Of 2023

Illustration. (Photo: Doc. Antara)

JAKARTA - Economist Rully Arya Wisnubroto predicts that Indonesia will experience an inflation rate of 5.25 percent by the end of 2023.

Rully assessed that Indonesia has so far become one of the countries that has succeeded in suppressing inflation amid the high inflation rate of developed countries such as the US, UK and other countries in the European region.

"Currently, Indonesia is one of the countries that is considered successful in reducing inflation while controlling inflation is still the main issue of developed countries today, such as the US, UK and Euro Zone countries," said the senior economist of Mirae Asset Securities in Jakarta, quoted from Antara, Wednesday, September 13.

Rully said the high inflation in these countries was exacerbated by the increase in commodity prices and world oil.

However, Rully assessed that Indonesia must remain vigilant, because these things are predicted to still trigger global market volatility, which will also have an impact on the financial market in Indonesia.

"The pressure on the rupiah will still be high with negative sentiment towards emerging markets. It also cannot be separated from the worsening factor of China's economic condition," he said.

In mitigating the risk of pressure on the rupiah, Bank Indonesia together with the government have implemented various policies to strengthen the financial sector in the country and at the same time reduce dependence on the US dollar so that it can mitigate the risk of fluctuations in the future.

The Central Statistics Agency (BPS) previously reported that year-on-year (yoy) inflation in August 2023 was recorded at 3.27 percent, with an increase in the Consumer Price Index (IHK) at 115.22.

Deputy III of the Presidential Chief of Staff (KSP) Edy Priyono also said that Indonesia has succeeded in controlling the pace of consumer prices (inflation) amid the high trend of world inflation, even when a number of countries are experiencing hyperinflation.

Argentina recorded hyperinflation of up to 113.4 percent, Turkish inflation was recorded at 47.8 percent.

According to Edy, among the G20 countries, Indonesia's inflation rate is the fourth lowest after China (-0.30 percent), Saudi Arabia (2.31 percent) and the United States (3.18 percent). Indonesia's inflation is also lower than the European region of 5.3 percent.

Indonesia's inflation control is driven by all components, both core inflation, tariffs regulated by the government (administered price), and food price components that are often volatile (volatile food).

Indonesia's inflation control is also inseparable from the stability of food component prices or volatile food. In August 2023, the component of food inflation was at the level of 2.42 percent or lower than 2022, which was 5.61 percent.