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Inflation may exceed 4% next year, BI warns, upping pressure on govt
The high inflation rate in Indonesia is likely to continue in 2023 as Bank Indonesia projects that prices will remain stubbornly high next year, extending what the country has been suffering throughout this year.
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Bank Indonesia Governor Perry Warjiyo speaks during the Economy and Monetary Police Perspectives at the International Monetary Fund and World Bank annual meetings in Nusa Dua, Bali, on Oct. 14, 2018.
(AFP/Sonny Tumbelaka)
T
he high inflation rate in Indonesia is likely to continue in 2023 as Bank Indonesia (BI) projects that prices will remain stubbornly high next year, extending what the country has been suffering throughout this year.
BI warns that the inflation rate may hover above its targeted 2 to 4 percent next year, according to presentation material shown by the central bank on Thursday during a national coordination meeting to tackle inflation.
“There is a risk that inflation may exceed the upper limit of the target range of 3 plus/minus 1 percent, as food and energy prices will [likely] remain high, while continued increase in demand will add more pressure to inflation,” BI Governor Perry Warjiyo said.
Read also: Govt prepares for 'turmoil' with prudent 2023 budget
The central bank estimates that, for next year, there is a possibility that inflation may go sideways again, just like in 2022.
In the 2023 state budget draft, the government has set a moderate inflation target at 3.3 percent next year, which is higher than 3 percent typically set in previous budget plans.
For this year, BI and the government set the inflation target at 2 to 4 percent, but the bank has reaffirmed that the figure would likely surpass the upper range.
