The domestic consumer price index (CPI) inflation in 2022 is projected to reach 4.5 percent to 4.6 percent year on year (yoy), or higher than the target of 2–4 percent, Bank Indonesia (BI) Governor Perry Warjiyo has predicted.

“It’s owing to price hikes of food and energy not subsidized by the government,” he said at a press conference here on Thursday.

Inflation is going up due to high supply pressures, in line with the rise in commodity prices and supply disruptions in the world, he explained.

The CPI in June 2022 recorded an inflation of 0.61 percent compared to the previous month (month-to-month/mtm). On an annual basis, CPI inflation in June 2022 was recorded at 4.35 percent yoy, higher than the inflation of 3.55 percent the previous month.

Nevertheless, core inflation was maintained at 2.63 percent yoy, supported by the consistency of BI’s policy in maintaining inflation expectations, Warjiyo said.

Meanwhile, inflation in volatile food prices also surged, which was mainly influenced by global food price increases and supply disruptions due to the weather.

“Inflation in the price group regulated by the government or administered prices is also still recorded high, influenced by inflation in air transport and energy,” he noted.

Although CPI inflation in 2022 is estimated to be higher than the upper limit of the target, he said he believes it is likely to return within the target range of 2–4 percent by 2023.

Hence, the central bank will continue to strengthen policy coordination with the government through the central and regional inflation control teams (TPIPs and TPIDs), he added.

Source: Antara News