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Inflation to jump to 3 percent in 2020 amid administered price hikes: Economists
The country recorded an annual inflation rate of 2.68 percent in January.
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Hot pick: Shoppers buy fresh chili at Peunayong traditional market in Aceh on Monday. The price of chili has increased from Rp 18,000 (US$1.32) per kilogram to Rp 32,000 per kg as many chili crops failed during the dry season. (Antara/Irwansyah Putra).
Usage: 0 (Antara/Irwansyah Putra)
I
ndonesia will see its inflation rate jump to more than 3 percent this year due to hikes in government-regulated prices, economists have said.
The country recorded an annual inflation rate of 2.68 percent in January, as chili, fish and tobacco prices increased, Statistics Indonesia (BPS) revealed on Monday. Meanwhile, lower prices of air tickets and fuel contributed to the month’s deflation.
“Going forward, we predict inflation in 2020 will remain stable within Bank Indonesia’s [BI] 2020 target range and reach 3.25 percent by the end of the year,” state-owned Bank Mandiri chief economist Andry Asmoro wrote in a research note on Monday.
“This relatively high inflation forecast compared to last year’s realization is mainly due to the possibility of some adjustments in administered prices,” he added.
The government sharply increased national health insurance premiums and the tobacco excise early this year, prompting concerns that such policies could trigger a rapid increase in inflation and weaken people’s purchasing power.
Read also: Indonesia records 2.68 percent January inflation using new formula
It raised the premium for the Health Care and Social Security Agency (BPJS Kesehatan) first-class service by 100 percent, more than doubled the cost for the second-class service and increased the premium for the third-class service by 64 percent. It also increased the cigarette excise by 23 percent on average and the retail price by 35 percent.
