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BI says inflation will remain stubbornly above 5 percent in first half
This year, the government will continue the National Movement for Food Inflation Control (GNPIP) to reduce food-related inflation.
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BI Governor Perry Warjiyo speaks during the Economy and Monetary Police Perspectives at the International Monetary Fund (IMF) and World Bank annual meetings in Nusa Dua, Bali, on Oct. 14, 2018.
(AFP/Sonny Tumbelaka)
B
ank Indonesia (BI) projects annual inflation in the first half of this year will still hover above 5 percent year on year (yoy), according to the central bank chief on Sunday.
The new projection marked a setback for BI’s optimistic estimates in February that announced inflation would fall more quickly to the country’s usual target, getting below 4 percent yoy in the first half of this year, before continuing to subside to no more than 3.5 percent in the second half.
BI decided to keep interest rates unchanged in February, stating no further hikes were needed considering inflation would cool faster than anticipated.
"We need to work hard to reduce the inflation rate, especially food-related price surges," BI Governor Perry Warjiyo said as quoted from Reuters.
However, the central bank expected that the country would still hit the target of reducing inflation to below 4 percent by the end of this year.
Perry also remained assured that the country's gross domestic product (GDP) would grow between 4.5 to 5.3 percent yoy this year.
"Based on our prediction, it would be around 4.9 percent yoy, and could go up to 5.1 percent if we can push domestic consumer spending and increase our exports to India and China," Perry said.
