Ministry of Finance of Republic of Indonesia : The Six Government’s and Central Bank’s Strategic Steps to Maintain 2017 Inflation

Jakarta, 25/01/2017 MoF - The government and Bank Indonesia (BI) held a coordination meeting with Inflation Control Team (TPI) and the National Working Group of Regional Inflation Control Team (TPID Pojaknas). The event that held at BI Thamrin Building on Wednesday (25/01) was attended by Minister of Coordinating Ministry for Economic Affairs, Minister of Finance, Minister of Transportation, and BI Governor.

BI Governor Agus Martowardojo said there were six agreements between the government and the Central Bank in 2017 to keep inflation on target. 'Bank Indonesia and the government agreed on six strategic steps to maintain inflation in 2017 within the range 4% ± 1%,' he said in the press conference.

Six strategic steps are: first, reduce the rate of volatile food price inflation within the range of 4-5%. Second, control the aftereffects from Government regulated prices policy (administered price), such as public transport fares control. Third, sequencing administered price policy. Fourth, strengthen Pokjanas TPI and TPID institutional core through Presidential Decree to be the National Inflation Control Team. Fifth, strengthen the coordination of Central and Local government with the implementation of 2017 Rakornas VII TPID in July 2017. Lastly, increase the BI policy mix to ensure macroeconomic stability.

'Consumer Price Index (CPI) inflation in 2016 was under control and was in the range of the inflation target. Such achievement was inseparable from good coordination between the government, local government, and Bank Indonesia at the national and regional levels 'he explained.

For additional information, the inflation rate in 2016 was recorded at 3.02 per cent (YoY) was the lowest level since 2010. The low inflation in 2016 was mainly due to core inflation which was the lowest recorded since 1997, low administered price inflation and controlled inflation on volatile food. (nr / rsa)