Indonesia's inflation to post slowest growth in 10 years

Source: Xinhua | 2019-12-30

The Indonesian central bank has estimated that the country's inflation this year would post the slowest growth since 2010, however the bank needs to put the U.S. Fed's upcoming policies into consideration before further launching stimulus on economy.

Governor of the Bank Indonesia Perry Warjiyo said on Friday that the lender forecast that the consumer price index would touch 2.93 percent by this year-end.

"This is resulted from a very good work performance," Governor Warjiyo noted.

On monthly basis, the inflation was forecast to nudge higher 0.55 percent in December from 0.14 percent in November, he said.

Air transport costs as well as prices of chicken egg and onion were predicted to be the significant factors to the price pressure before the Christmas and New Year holidays, said Warjiyo.

The Indonesian central bank heralded a further loosening policy in coming months, which is supported by benign inflation, to help spur the sluggish economic growth amid the current global economic uncertainty.

The bank cut its seven-day reverse repurchase rate by 100 basis points from July to October, before turning its focus on maintaining the rupiah stability last month.

The government said the initial economic growth target of 5.3 percent this year is likely not to be achieved as the global economic slowdown has trimmed demands of Indonesia's exported products and weakened importation of raw materials and capital goods.