"Inflation has entered the era of three percent. Currently we are in the competitive level regionally. We need to keep at that level," Assistant Governor and head of the economic policy department of the Central Bank Dody Budi Waluyo said in a discussion held by the central bank and the Indonesian Association of Economics Graduates(ISEI) here on Thursday.
By July 2017, the countrys inflation year-on-year was only 3.88 percent with inflation year to date at 2.6 percent.
The inflation rate was within the central banks target of 3-5 percent yoy.
Bank Indonesia has the role to keep inflation within target to support the peoples buying power, strengthen rupiah and economic stability, Dody said.
Strong purchasing power of the people would contribute to sales of industrial goods, and rupiah stability would help improve efficiency in production cost as some of the industrial basic materials are still imported, he said.
Senior Deputy Governor of the Central Bank Mirza Adityaswara said Bank Indonesia coordinates with the central government and regional administrations in various strategic issues such as in the development of manufacturing industry and plays an active role in accelerating structural reform.
Mirza said strong upstream industry would help strengthen downstream industry and to reduce dependence on imports for industrial basic materials.
He said the contribution of the manufacturing sector to the countrys Gross Domestic Product is only 20 percent , down from 28 percent in 1998.
The countrys manufacturing industry has not grown as expected as indicated by the relatively low bank credits for the sector, he said, adding credits for the manufacturing industry was only 17 percent of total bank credits in the country, down from more than 20 percent several years earlier.(*)