April Would Be the Peak of Indonesia’s Inflation Rate in 2023

Indonesian Traditional Market

The 2023 inflation rate peak is predicted to happen from March to April. This can be seen historically from year to year, where the peak of inflation will occur during the Ramadan and Idul Fitri moments.

The results of the Bank Indonesia Retail Sales Survey (BI) indicate that inflationary pressure will decrease in the period of February and May 2022.

This is reflected in the General Price Expectations Index in February and May 2023 which were recorded at 134.6 and 140.2 respectively, down from 138.0 and 140.8 in the previous month.

Bank Indonesia BI in its report, Thursday (12/1/2023), explained “Respondents informed them of price reductions due to the sufficient stock of goods”

Meanwhile, Executive Director of the Center of Reform on Economics (CORE) Mohammad Faisal said that if viewed historically, the pattern of the inflation rate will indeed decrease after the momentum of the new year and Idul Fitri.

Faisal estimates that the highest inflation rate will occur in the March and April periods due to the momentum of Ramadan and Idul Fitri.

In January 2022, the inflation rate is expected to reach 0.5 percent monthly (month-to-month/mtm), sloping from the inflation rate in December 2022 which reached 0.66 percent mtm.

Previously, developments in December 2022 showed that Consumer Price Index (CPI) inflation was under control.

Based on data from the Central Statistics Agency (BPS), CPI inflation in December 2022 was recorded at 0.66% (mtm) so 2022 CPI inflation was 5.51% (YoY), an increase compared to 2021 CPI inflation of 1.87% (YoY) and higher than the target of 3.0+1%, mainly affected by the impact of subsidized fuel oil (BBM) price adjustments in September 2022.

Various monthly developments show that inflation after the increase in fuel prices is back under control, reflected in inflation expectations and inflationary pressures that have continued to decline and are lower than initial forecasts.

The controlled development of CPI inflation is inseparable from the positive influence of tighter policy synergies between the Central and Regional Governments, Bank Indonesia, and various strategic partners in reducing the inflation rate, including controlling the after-effects of fuel price adjustments.