TEMPO.CO, Jakarta - Inflationary pressure in January is expected to ease in February and March 2017 as the impact of vehicle administration fee hikes will ease and food supplies in the first quarter’s harvesting season will increase.
Bank Mandiri senior economist Andry Asmoro predicted that with the easing inflationary pressure, the inflation rate in February 2017 would decline to 0.7 percent from 0.93 percent in January.
Also read: Minister Darmin: January Inflation High
“[The inflation rate] will stand at around 0.7 percent, because the difference of 0.23 percent will be gone. The inflation rate is expected to drop further in March and April if the harvesting season is successful,” Andry said in Jakarta on Thursday, February 2, 2017.
Andry added that the main trigger of January’s inflation rate was the removal of electricity subsidy for 900 VA customers, which is predicted to boost household expense.
However, Andry reminded the government and Bank Indonesia (BI) to improve coordination in order to maintain the annual inflation rate at 3 or 5 percent. According to Andry, the inflation rate could increase significantly if the government and BI failed to maintain volatile food prices and core inflation.
Andry suggested that the government must control the volatile food inflation effectively due to pressure from administered prices.
Andry revealed that Bank Mandiri’s economists predicted that the 2017 inflation rate would stand at around 4.2 percent.
ANTARA
