BI: Inflation Rate Could Reach 8.1%

TEMPO.CO, Jakarta - Bank Indonesia predicted that, by the end of 2014, the inflation rate could reach 8.1 percent, far higher than the target set by the government at 5.3 percent.

“Overall, the inflation rate in 2014 would be somewhere between 7.9 to 8.1 percent,” Bank Indonesia Deputy Governor Ronald Waas said on Friday, December 12, 2014, in Semarang.

Ronald added the increase in inflation rate was particularly caused by fuel price, public transportation tariff and electricity price hikes.

BI recorded that the month-on-month inflation figure for November reached 1.50 percent or 5.75 percent cumulatively (year-to-day) and 6.23 percent annually (year-on-year). The fuel price hike has heightened the inflation expectation that could grind public income and increase poverty.

According to Ronald, the central bank has maintained the tight monetary policy by increasing BI rate to 7.75 percent in November 2014. The BI rate increase was a part of the efforts to reduce the inflation following fuel price hike.

“In 2015, the inflation rate is expected to be back on track at 4 percent,” Ronald said.

NURIMAN JAYABUANA| ROFIUDDIN (SEMARANG)