Focus of Indonesia government : Inflation control


Focus of Indonesia government : Inflation controlFocus of Indonesia government : Inflation control - Bank Indonesia (BI) has advised the government on the importance of focusing on inflation control, following the increase of administered prices in April.

Indonesia's inflation rate stood at 4.17 percent year-on-year (yoy) in April as administered prices, particularly electricity and fuel, inflated by 8.68 percent yoy.

The country recorded a 3.02 percent inflation rate last year.

"We have to control volatile food price inflation so it is not more than 5 percent because administered prices have already increased in this first half," Bank Indonesia senior deputy governor Mirza Adityaswara said during a dissemination of the Indonesia Economic Report 2016 in Kuta, Bali, on Monday.

Volatile food prices deflated by 1.26 percent in April, caused by price decreases in major food commodities, such as red and green bird’s eye chili, rice, sugar, beef and chicken eggs.

"If we want to compensate [the administered price inflation] so that there will not be a hike in total inflation, then we have to control the volatile food prices," he said.

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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