BI Projects Rainy Season will Lead to Higher Inflation.
A logo of Bank Indonesia is seen at a Bank Indonesia building in Jakarta, November 18, 2015. REUTERS/Garry Lotulung
TEMPO.CO, Jakarta - Bank Indonesia (BI) is concerned about a possible inflation increase in 2017 due to climate anomalies that are affecting food prices. Meanwhile, the government has planned to raise electricity tariff for 900 VA subscribers, which will also trigger staple good price hikes.
"By the end of 2016, inflation rate is expected to remain under control. But by 2017, it is expected to rise concerning how most of Indonesia is now being swept by rains—earlier than expected, which will lower food production," the central bank's assistant director for economic and monetary department Handri Adiwilaga said in Jakarta, Tuesday, October 11.
Speaking as a guest speaker in BI's Regional Journalist Gathering dubbed 'Inflation in Indonesia and its Challenges' in Jakarta, Handri said that although inflation is expected to rise next year, as of August 2016 the inflation rate is stable—thanks to the low inflation rates in two main islands Java and Sumatera.
East Nusa Tenggara even posted a 0.17 percent deflation in September and 0.80 percent deflation in August.
Meanwhile, a number of provinces are experiencing high inflation, including West and South of Kalimantan, as well as Papua.
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