BANK INDONESIA FORECASTS INFLATION RATE FOR 2015 TO REACH 3.5 PERCENT

Jakarta, 11 Muharram 1437/24 Oktober 2015 (MINA) – Bank Indonesia Governor Agus Martowardojo predicts the inflation rate at the end of 2015 could reach 3.6 percent, or lower than the expectation.

Originally, inflation is predicted at four plus or minus one percent. But during the last discussion at the Board of Governors we saw inflation at the end of this year will be below four percent or maintained at 3.6 percent,” he said after attending a Financial System Stabilitation Coordination Forum (FKSSK) meeting here on Thursday night.

Agus attributed the decline in the inflation rate to the improvement of the national economy fundaamental, which began to show positive results, although there are still risks to global and domestic pressure.

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This is reflected in the deflation of 0.05 percent in September, meaning the national inflation rate of the calendar year from January to September 2015 stood at 2.24 percent and annual basis (year on year) 6.83 percent.

Even until the second week of October, the central bank still recorded a deflation of 0.09 percent. However, this is still an approximate figure because the numbers are still waiting for official release until the end of the month tally.

“This is only the second week. Later we noticed again for the third week. Currently, year on year was 6.83 percent. But then at the end of the year will go down four per cent,” said Agus.

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Although inflation data started to show an improvement, Agus is still reluctant to reveal the possibility of lowering the benchmark interest rate (BI Rate) in the near future.

“Indeed, domestic economic conditions showed a good condition and strong. But the Board of Governors decided based on the data, and we make a policy change that is supported by the data,” he added. (T/R07/R01)

Mi’raj Islamic News Agency (MINA)