Indonesia: BI forecasts inflation to plunge to 1.5-3.5 percent in 2024

This estimate is supported by close synergy between the government and the central bank

Jakarta (ANTARA) – Indonesia’s central bank, Bank Indonesia (BI), projects that inflation will fall to a level of 1.5 percent to 3.5 percent in 2024 after possibly lying in the range of two to four percent in 2023.

Currently, inflation is recorded at 5.42 percent as of November 2022 as compared to the same period last year or on a year-on-year (yoy) basis.

“This estimate is supported by close synergy between the government and the central bank,” BI Governor Perry Warjiyo stated at the 2023 Jakarta Economic Outlook National Seminar on Wednesday.

Warjiyo noted that the synergy to reduce inflation was driven by energy subsidies by the government, a measurable increase in BI interest rates, measures to stabilize the rupiah by BI, and the close coordination of Central and Regional Inflation Control Teams (TPIP and TPID), including the National Movement for Food Inflation Control (GNPIP).

According to Warjiyo, synergy, coordination, and cooperation are the key for Indonesia to avoid the crisis so far, especially during the COVID-19 pandemic, and this will also support the continuation of the national economic recovery process.

Through synergy, the BI governor is optimistic that the domestic economic recovery process will continue to improve amid the global turmoil.

BI estimates that Indonesia’s economic growth in 2023 will be quite good, at around 4.5 percent to 5.3 percent, as compared to the previous year and will increase higher to 4.7 percent to 5.5 percent in 2024 in comparison with 2023.

“Apart from exports, increased consumption and investment will also support national economic recovery, in addition to being supported by downstream programs, infrastructure development, influx of foreign investment, and tourism development,” Warjiyo noted.