CORE: Inflation projection of 1.5–3.5 per cent in 2027 is reasonable
Jakarta (ANTARA) - Mohammad Faisal, Executive Director of the Center of Reform on Economics (CORE) Indonesia, regards the inflation projection in the range of 1.5 to 3.5 percent within the Macro Economic Framework and the Macro Policy for Fiscal Policy of the RAPBN for the 2027 Budget Year as still reasonable.
“Kalau proyeksi inflasi pada kisaran (range) 1,5 sampai 3,5 persen menurut saya masih lebih oke, masih lebih bisa dicapai. Mungkin lebih ke batas atas,” Faisal said when contacted by ANTARA in Jakarta on Wednesday.
He said the achievement of the inflation target depends on government policy as well as Bank Indonesia (BI).
“Memang inflasi itu dikendalikan oleh Bank Indonesia, tapi naik turunnya itu sering kali juga bergantung pada kebijakan pemerintah,” he said.
He added that amid global pressures, what is most worrying first and foremost is inflation due to rising prices of goods.
“When you look at the current inflation level, it is already higher than in previous years. But compared to BI’s target of 1.5 to 3.5 percent, it is still within BI’s target,” he said.
Faisal said that this is aided by government policy, notably the decision to keep prices of subsidised fuel (BBM) and LPG stable, which has a significant impact on controlling inflation.
“So if the direction next year remains the same, it is possible that inflation could stay in that range unless there is a shift in government policy,” he said.
Faisal also urged the government to anticipate a number of challenges so that inflation control in 2027 can be achieved in line with macroeconomic assumptions, recognising that price pressures on goods may persist into the next year and that the El Niño climatic phenomenon can affect agricultural production.
In the Macro Economic Framework and Key Fiscal Policy for the RAPBN for the 2027 Budget Year presented by President Prabowo Subianto in today’s DPR plenary session, the government projects inflation of 1.5 to 3.5 per cent to support the stability of households’ purchasing power and the exchange rate.
The government also targets the rupiah exchange rate against the US dollar to be in the range of Rp16,800 to Rp17,500.
Through sustainable fiscal management, the government is optimistic that national economic growth can reach around 5.8 to 6.5 per cent in 2027 as a stepping stone toward the 8 per cent growth target in 2029.
The President emphasised that exchange-rate stability and economic growth are aimed at reducing poverty to between 6.0 and 6.5 per cent and lowering the open unemployment rate to between 4.30 and 4.87 per cent.