Inflationary pressure may increase in 2nd semester: BI

Among the risk factors is the impact of the El Nino weather phenomenon on the production of rice, CPO, and several other commodities.
Jakarta (ANTARA News) - Bank Indonesia (BI) has forecast that the inflationary pressure may increase in the second semester this year as a result of varied risk factors.

"Among the risk factors is the impact of the El Nino weather phenomenon on the production of rice, CPO, and several other commodities," Director of BIs Economic and Monetary Department, Dody Zulverdi, stated during a discussion with newsmen here on Wednesday.

Zulverdi noted that with regard to the major impact on the index of consumer prices (IHK), the government will monitor the impact of El Nino, especially on rice, if its intensity increases from medium to strong.

Another factor that will create inflationary pressure is the electricity price hike that will be imposed from July on the 1.3 thousand VA to 5.5 thousand VA household group.

"The plan to hike air fares by 20 to 25 percent and long-and middle-distance economy class railway tickets and liquefied petroleum gas will also have the potential to increase inflation," he pointed out.

Dody remarked that various inflationary risks will make the inflation pattern during the Islamic fasting month of Ramadhan this year different from the previous one.

"The difference is mainly to be found in the price correction, which may not possibly be as deep as before," he claimed.

Dody believes that it will happen because there will be an adjustment in various administered prices in conjunction with the impact of El Nino, which is forecast to be felt around July to August.(*)

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