BI Governor: Indonesia Manages to Maintain Low Inflation Rate

Governor of Bank Indonesia Perry Warjiyo delivers a financial report at the 2024 National Coordination Meeting on Inflation Control and the Regional Inflation Control Team (TPID) Award, at the State Palace, Friday (06/14). (Photo by: PR of Cabinet Secretariat/Rahmat

The inflation rate in Indonesia remains relatively under control over the past ten years, even, one of the lowest in the world, Governor of the central bank Bank Indonesia Perry Warjiyo has stated.

“Indonesia’s inflation trend in the last ten years has been moderately stable. As of May 2024, the inflation of the Consumer Price Index (CPI) was recorded at 2.84 percent,” the BI Governor said at the 2024 National Coordination Meeting on Inflation Control and the Regional Inflation Control Team (TPID) Award, at the State Palace, Friday (06/14).

According to him, the inflation rate will remain under control within the 2.5% ± 1% target for 2024-2025 period.

Due to global uncertainties, Bank Indonesia and the Government would collaborate closely to implement consistent monetary policies in order to safeguard Indonesia’s economic stability by controlling inflation and maintaining the stability of rupiah exchange rate.

“Monetary policies are expected to consistently maintain stability by ensuring the country’s inflation is still under control and the rupiah exchange rate remains stable,” he explained.

The BI Governor also revealed that Bank Indonesia would synergize with the Central Government and regional governments to further strengthen the policy mix and support sustainable economic growth.

On that occasion, Perry highlighted Bank Indonesia’s initiatives to provide large-scale liquidity incentives for the banking sector so they could facilitate easier distribution of loans across various sectors to boost economic capacity, including through macroprudential policies.

“To support sustainable growth, loose macroprudential policies are carried out through liquidity incentives for banks, credit financing to various sectors, including agricultural downstream and MSMEs in the food sector,” he added.

The BI Governor further said that Indonesia’s economy remains strong, which is reflected in maintained economic growth at the level of 5 percent with an inflation rate below 3 percent.

He also pointed out that strong synergy among Bank Indonesia, the Central Government, and regional governments plays a pivotal role in mitigating the ongoing global geopolitical conflicts.

“We need to adopt sustainable strategies and enhance collaboration moving forward. Sustainability is crucial to control inflation, especially to reduce the risk of rising food and energy prices due to the current global geopolitical conflicts, global financial market uncertainty, as well as structural problems such as productivity, inefficiency, distribution, and integration of food data.” the BI Governor remarked. (ECH/ABD) (RIF/MMB)