TEMPO.CO, Jakarta - Samuel Sekuritas Indonesia predicts annual inflation in 2017 could touch the figure of 4.5 percent year on year (yoy).
Inflation could rise to above 4 percent yoy beginning April 2017, it added.
This is in line with the normalization of drastic cuts in fuel prices in April 2016.
Samuel Sekuritas optimistic outlook on commodity prices, especially crude oil in 2017 is also the reason for the higher inflation.
Although the inflation projection is trimmed, expectations of BI Rate in 2016 is maintained at 5 percent.
Global uncertainty as Fed Rate hike speculation or global financial market turbulence in the fourth quarter in 2016 can also hinder drastic monetary easing by the central bank Bank Indonesia.
The number of policies that could push inflation higher are among others, the government that is currently preparing to raise taxes and cigarette prices, the CPI weights of goods by 1.5 percent, and also the removal of subsidies for electric customers of 900 KV that will be done by 2017 in line with the electricity subsidy that is trimmed.
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