Sentral Bank of Indonesia: Indonesia's Economy Resilient Amid Global Pressures
Supply disruptions leading to inflation in various countries.
REPUBLIKA.CO.ID, JAKARTA -- Bank Indonesia (BI) Deputy Governor Doni Primanto Joewono said Indonesia's economy is resilient amid global pressures, one of which is demonstrated by inflation remaining within the target range.
“Of course, we should be grateful in the midst of global pressure, Indonesia's economy is showing strong resilience,” Doni said during a virtual demonstration of the National Movement for Food Inflation Control (GNPIP) of the Borneo Region in Jakarta, Wednesday (27/3/2024).
He said the momentum of the global economic recovery was continuing even though it was still overshadowed by political fragmentation and uncertainty. That triggered continued disruptions on the supply side causing inflation in various countries to still be above market forecasts.
Amid these global conditions, Consumer Price Index (CPI) inflation in February 2024 remained within the target range of 2.5 plus minus one percent due to the consistency of monetary policy and the tight synergies of interparty inflation control.
February 2024 CPI inflation was recorded at 2.75 percent year on year (yoy) supported by low core inflation of 1.8 percent yoy, and administered prices inflation that decreased to 1.67 percent yoy.
But on the other hand, volatile food inflation still showed improvement and became 8.47 percent yoy. This is also as a result of the impact of the El Nino phenomenon, a seasonal factor and shifting growing season that mainly occurs in the commodities rice and red pepper.
Looking ahead, Bank Indonesia believes that 2024 Consumer Price Index (CPI) inflation remains contained within the target range of 2.5 plus minus one percent, and core inflation is expected to be maintained.
Inflation can be maintained in line with inflation expectations that are within the target, the economy's still large capacity that can respond to domestic demand, low imported inflation in line with stable exchange rates, and the positive impact of structural factors related to the development of digitalization.
In addition, the government continues to undertake strategic measures to control inflation by 2024, including maintaining the availability of supplies and smooth food distribution to mitigate short-term risks, including anticipating shifting harvest seasons and increased demand ahead of National Religious Great Days such as Ramadan and Eid al-Fitr.
The government also strengthened food security through efforts to increase productivity and food downstream, as well as strengthened the availability of food supply data to support the formulation of inflation control policies.
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