TEMPO.CO, Jakarta - Bank Indonesia (BI) senior deputy governor Mirza Adityaswara expressed optimism that the annual inflation would be below 4 percent, plus or minus 1 percent.
“We have one more month in 2016, and we see that [the inflation rate] will stand at between 3 percent and 3.2 percent,” Mirza said in Jakarta on Thursday, December 1, 2016.
The Central Statistics Agency announced on Thursday that the monthly inflation rate in November 2016 stood at 0.47 percent, resulting in a 2.59-percent annual inflation rate in the period of January-November 2016. The figure increased by 0.14 percent when compared to that in October 2016.
Mirza said that the rise in the inflation rate was significantly caused by rupiah weakening in November 2016. According to Mirza, the main case was fuctuative volatile food prices and administered prices.
Mirza predicted that next year’s inflation rate would be mainly caused by administered prices, as the government has planned to raise electricity prices for 900 VA customers in January 2017.
Mirza added that the inflation rate in 2017 would stand at somewhere between 3 percent and 5 percent.
“However, we hope it won’t exceed 4 percent. Therefore, with low inflation rate, our relaxed monetary policies can be maintained,” he concluded.