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Jakarta Post

2018 inflation may be below 3.5%: Bank Indonesia

  • News Desk

    The Jakarta Post

Jakarta   /   Mon, August 28, 2017   /   11:11 am
2018 inflation may be below 3.5%: Bank Indonesia The Bank Indonesia building on Jl. M.H. Thmatin in Central Jakarta (JP/Wienda Parwitasari)

Bank Indonesia has said the inflation rate in 2018 could be less than 3.5 percent if the government did not increase administered prices and could control food price volatility.

“The figure of BI's [inflation rate] projection is slightly below 3.5 percent,” the Bank Indonesia governor's assistant for economic policy and monitary affairs, Dody Waluyo, said in Yogyakarta on Monday, as reported by Antara.

The low inflation rate assumption will happen if the government does not increase several administered prices, including subsidized fuel prices, electricity rates and natural gas prices in 2018.

Read also: 2018 state budget: Toward more inclusive growth?

“The government’s decision not to increase the price of fuel, electricity and natural gas will make the inflation rate controllable,” said Dody, adding that the government should also be able to control inflation arising from the food price volatility.

He said the government and BI had to coordinate closely to ensure the price stability for rice, meat, chili, sugar and other staple foods.

BI had initially set its inflation rate assumption at between 3 and 4 percent for 2017 and between 2.5 and 3.5 percent in 2018, while the government's estimated inflation rate was 3.5 percent as stated in the draft 2018 state budget.

Meanwhile, the inflation rate assumption was 4.3 percent, as stated in the 2017 revised state budget.

The Central Statistics Agency recorded that the inflation rate from January to July reached 2.6 percent, or a 3.88 percent year-on-year increase. (bbn)