IMF Projects Indonesia's Inflation to Remain Lower Than Global Inflation

Economics & Macro

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Adi Ahdiat 12/10/2022 14:40 WIB

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The IMF predicts that Indonesia's inflation rate will continue to rise until next year. On a slightly positive note, Indonesia's inflation is forecast to remain lower than global inflation.

Indonesia and Global Inflation Projections according to the IMF (2022-2023)

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IMF Projects Indonesia's Inflation to Remain Lower Than Global Inflation

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Indonesia and Global Inflation Projections according to the IMF (2022-2023)

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In its October 2022 edition of the *World Economic Outlook* report, the International Monetary Fund (IMF) projects that Indonesia's inflation rate will continue to rise until next year.

The IMF predicts that Indonesia's annual inflation will reach 4.6% throughout 2022, then increase to 5.5% in 2023.

On a slightly positive note, Indonesia's inflation is forecast to remain lower than global inflation. The IMF projects global inflation to reach 8.8% in 2022 and 6.5% in 2023.

Indonesia's inflation until next year is also projected to be lower than the average inflation rate of developing countries, as shown in the graph above.

Although inflation is projected to remain high, the IMF states that there are indicators offering some hope, one of which is food prices.

"Food prices, which have so far been the largest driver of global inflation, have shown a decline. In general, several other indicators also suggest that the surge in commodity prices may be starting to ease as global demand slows, helping to moderate inflation," the IMF explained in its report.

However, the IMF remains cautious about future risks that could push inflation higher, including the Russia-Ukraine war and extreme weather.

"Energy prices will remain highly sensitive to the war in Ukraine and the potential for other geopolitical conflicts," the IMF stated.

"Extreme weather events could damage global food supplies, driving up the prices of staple foods and having dire consequences for poor countries," it continued.

Editor : Adi Ahdiat

"Disclosure: This is an AI-generated translation of the original article. We strive for accuracy, but please note that automated translations may contain errors or slight inconsistencies."