REPUBLIKA.CO.ID, JAKARTA -- Bank Indonesia has predicted that the inflation rate will drop to 4.2 to 4.3 percent by the end of the year, although it is above 7.0 percent currently.

"We saw that by the end of the first and second quarter of 2015, the rate of inflation was above 7.0 percent. However, by the end of the year, there will be plus/minus 1 percent year-on-year," Governor of Bank Indonesia Agus Martowardojo said here on Wednesday.

According to the National Statistics Agency, inflation in June was recorded at 0.54 percent month-to-month, 0.96 percent calendar year, and 7.26 percent year-on-year.

Martowardojo added that this year, there were indications of a decline in public consumption in the last six months.

"People's weaker purchasing power has certainly had impacts. Let us see. We must safeguard the economy in the second semester," the central bank governor emphasized.

Furthermore, Deputy Governor of Bank Indonesia Perry Warjiyo noted that even though the inflation rate was a bit higher as compared to that last month, the rate in June was still relatively low as compared to those in previous years.

"The inflation in June is also lower than what we expected," Warjiyo affirmed.

He estimated that the rate of inflation in 2015 will be lower than that in 2014.

"Driven by demand, which is under control, and close coordination with the government, including regional inflation control teams, we are optimistic that we can curb the inflation rate at 4 percent, plus/minus 1 percent, by the end of the year and next year," he guaranteed.

Warjiyo also pointed out that the central bank will continue to closely monitor global economic developments and help to improve the domestic economy in the future.

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