JAKARTA, Aug 1 — Indonesia’s inflation rate increased 4.94 per cent year-on-year (y-o-y) in July 2022 against 1.52 per cent in the same month last year, the highest since October 2015.
Statistics Indonesia (BPS) attributed the higher rate to a 1.16 per cent rise in food, drinks and tobacco, led primarily by red chilli, cooking oil, shallot and cigarettes.
Transport went up 1.13 per cent, while housing, water, electricity, and household fuel rose 0.47 per cent.
In a statement, BPS said the global food and energy crisis has put pressure on inflation domestically throughout 2022.
The condition is still relatively well maintained amid stable economic fundamentals, it said, adding that the rate is relatively lower compared to some other G20 countries.
Meanwhile, RHB Investment Bank Bhd maintains Indonesia’s inflation forecast at 3.5 per cent this year, albeit with upside risks, in line with the official forecast of 3.0 per cent.
The bank said headline inflation will stay above the 4.0 per cent into November 2022, and expects core inflation to speed up further in the third quarter before dissipating in the fourth quarter.
In a note, it calls for Bank Indonesia to lift the policy rate to 4.0 per cent in the second half of 2022, in view of the higher inflationary pressures seen of late.
The central bank may start its first 25 basis points (bps) bps lift-off in September 2022 and another 25 bps hike in December 2022, the bank said.
— Bernama
