Indonesia: Government needs to focus on inflation control: Bank Indonesia – 22 May 2017

  • Bank Indonesia (BI) has advised the government on the importance of focusing on inflation control, following the increase of administered prices in Apr 17.
  • Indonesia’s inflation rate stood at 4.17% y/y in Apr 17 as administered prices, particularly electricity and fuel, inflated by 8.68% y/y.
  • The country recorded a 3.02% y/y inflation rate in 2016.
  • Volatile food prices deflated by 1.26% in Apr 17, caused by price decreases in major food commodities, such as red and green bird’s eye chili, rice, sugar, beef and chicken eggs.
  • The central bank will cooperate with the government and local administrations across the country to pursue inflation controlling measures.
  • “BI always discusses inflation because higher prices weaken people’s purchasing power,” Mirza said, adding that over-the-roof inflation would reduce the real interest rate of investments making the country less lucrative for big investors.

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