The figure is lower than the consensus forecast of 5.9 percent yoy. So, the consensus forecast is still high, though it has declined from the previous forecast of 6.7 percent yoy.
Jakarta (ANTARA) - Bank Indonesia (BI) has slashed its consumer price index (IHK) inflation forecast for 2022 to 5.6 percent year on year (yoy) from its previous estimate of 6.3 percent.

"The figure is lower than the consensus forecast of 5.9 percent yoy. So, the consensus forecast is still high, though it has declined from the previous forecast of 6.7 percent yoy," BI Governor Perry Warjiyo said while announcing the results of the monthly meeting of BI's board of governors, which was followed online from Jakarta on Thursday.

He predicted that core inflation would reach 3.5 percent yoy by the end of the year and peak at 3.7 percent yoy in the third quarter of 2023.

Thus, BI is committed to keeping core inflation below 4 percent yoy in the first half of 2023 by raising its key interest rate as a front-loaded step, he informed.

BI, along with the government, will also continue the subsidy program and the national movement for food inflation control (GNPIP) as well as coordinate with the central inflation controlling team (TPIP) and regional inflation controlling teams (TPID).

He said he believes that the efforts will be able to keep volatile food inflation and administered price inflation under control. Thus, consumer price inflation will soon fall to a range of 2–4 percent, as targeted by BI earlier.

The consumer price index was recorded at 5.71 percent yoy in October 2022, well above the target of 2–4 percent. However, it was lower than the forecast of 5.95 percent yoy the previous month.

"The volatile food inflation fell to 7.19 percent yoy. Yet, we need to strengthen close synergy and coordination through TPIP, TPID, and GNPIP to further lower it," Warjiyo said.

He further said that the administered price inflation was recorded at 13.28 percent yoy in October. Hence, there needs to be strong coordination to mitigate the subsequent impact of fuel price adjustment and keep transport fares lower.

Meanwhile, core inflation was pegged at 3.31 percent yoy in October, lower than in the previous month.

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Translator: Agatha Olivia Vi, Suharto
Editor: Rahmad Nasution
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