Skip to main content
Best News Website or Mobile Service
 
WAN-IFRA Digital Media Awards Worldwide
Best News Website or Mobile Service
 
Digital Media Awards Worldwide
Hamburger Menu

Advertisement

Advertisement

Business

Indonesia central bank sees Oct inflation easing to 5.8% y/y, to raise rate if necessary

Indonesia central bank sees Oct inflation easing to 5.8% y/y, to raise rate if necessary

FILE PHOTO:People shop at a traditional market in Depok, on the outskirts of Jakarta, Indonesia, June 2, 2022. REUTERS/Ajeng Dinar Ulfiana

JAKARTA : Indonesia's central bank expects headline inflation this month to ease to 5.8 per cent year-on-year and food inflation to come in below 10 per cent amid efforts by authorities to shore up food supplies, a deputy governor said on Monday.

The annual inflation rate in Southeast Asia's biggest economy in September reached a seven-year high of 5.95 per cent, with volatile food inflation at 9.02 per cent.

Bank Indonesia (BI) Deputy Governor Dody Budi Waluyo also warned that the central bank sees persistent risks from high global energy and food prices, particularly with European countries set for higher demand during winter.

"We see the potential of higher gas and oil prices in the coming months," he said, noting that wheat supplies could also face further restrictions due to the war in Ukraine.

The median forecast from 20 economists for October's inflation is seen at 5.99 per cent, according to a Reuters poll.

The statistics office will announce official data on October inflation on Tuesday Nov 1.

Going forward, the central bank sees both potential for inflation to rise further and for its rate hikes to impact the economy, Dody said, meaning that GDP may grow below estimates this year.

In its latest estimate, BI said Indonesia's GDP growth in 2022 will tend toward the upper end of 4.5 per cent to 5.3 per cent.

Dody reiterated BI's commitment that rates will only be raised if necessary and not "to address inflation that should not be addressed with rate policy".

"What we fear is inflation expectation," he said. "...Expectation is the most dangerous if we don't deal with it quickly."

BI said in its August meeting that its rate hike was to preempt risk of rising core inflation and inflation expectations. In its last meeting, BI raised policy rates by 50 basis points to 4.75 per cent.

BI will hold its next monthly policy meeting on Nov. 16-17.

Source: Reuters
Categories

Advertisement

Also worth reading

Advertisement