"The inflation rate will stay less than 4 percent. Based on our last forecast it will stand at 3.2 percent for this year," BI Deputy Governor Perry Warjiyo said here Friday.
Three factors will be able to control price hikes; first, inflation expectation is anchored properly; second, demand for goods and services is far below supply; and third, the prices of imported goods can be controlled, he noted.
"Because of the three factors, the inflation rate can be kept under control at a range of 3 percent to 5 percent," he said.
The economic growth forecast of 5.1 percent to 5.2 percent for this year will also not affect the inflation, he said.
In addition, the governments plan to lower corporate income tax will also have no impact on the inflation rate, he said.
"Actually, it is rather difficult (to say that). I do not see any correlation between the drop in corporate income tax and the inflation rate," he said.
He asked the public not to link the governments plan to reduce corporate income tax to the inflation rate because the policy is actually aimed at increasing economic growth.
The decline in corporate tax will encourage businessmen to invest, thus spurring economic growth, he said. (*)
Editor: Heru Purwanto
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