Indonesia Sees 0.4 Percent Deflation at End of August: BI

TEMPO.CO, Jakarta - The Governor of Bank Indonesia (BI) Agus Martowardojo said Indonesia sees 0.4 percent deflation at the fourth week of August. According to Agus, the figure was in line with the government’s target in the revised state budget 2016.

“The deflation figure shows that inflation rate will stand at below 4 percent throughout 2016,” Agus said Tuesday after a meeting on the draft state budget 2017 with the House’s Budget Council at Senayan parliamentary complex, Jakarta.

The annual inflation rate stood at 3.21 percent in July, according to Agus. “However, compared to Asean countries, their inflation rate is at an avarage of 1.5 to 2 percent. Indonesia’s efforts in controlling inflation rate is commendable. But it’s still challenging,” he said.

Agus said that some issues still pose risks to inflation, particularly la nina phenomenon. “Monsoon has started. It would made an impact on volatile food prices and it could also push inflation. Prices have been changing compared to that of lebaran period,” he said.

In 2017, inflation rate is forcasted at around 4 plus/minus 1 percentage point. According to Agus, inflation rate could be affected by adjustments to the price of 900 volt-amperes (VA) electricity. “If adjustments are made, it could affect inflation. However, inflation will remain at the range of 4 plus/minus 1 percentage point,” he noted.

ANGELINA ANJAR SAWITRI