Jakarta (Indonesia Window) – Bank Indonesia (BI) has estimated that inflation as measured by the Consumer Price Index (CPI) in 2022, would increase to 4.2 percent.

"However, core inflation and inflation expectations can still be controlled in the range of two percent to four percent this year and next year," BI Governor Perry Warjiyo explained in an online seminar under the theme 'Managing Inflation to Boost Economic Growth', Wednesday (June 15).

This estimate is a reflection of very strong fiscal and monetary coordination, with fiscal increasing subsidies so that not all increases in world energy and commodity prices have an impact on domestic inflation.

According to Perry, fiscal and monetary coordination managed to contain the impact of high commodity price increases, both energy prices and world food prices, on inflation in the country.

"Indonesia's condition is certainly different from other countries, which are currently experiencing a high inflation spike that has reached double digits," he added.

The government's steps in increasing subsidies, especially for premium fuel, diesel, electricity, LPG, and increasing social assistance are very helpful for the community in dealing with rising world energy and food prices.

This year BI is still participating in financing the state revenue and expenditure budget by purchasing government securities of 224 trillion rupiahs (some 15.2 billion U.S. dollars) for the health and humanitarian sectors.

The allocation of these funds is left entirely to the government, whether part of it would be used to finance the increase in subsidies in the context of containing the impact of rising commodity prices and global inflation on domestic inflation so that it can be controlled, or for other purposes.

Reporting by Indonesia Window