Bank Mandiri Research: Fuel Price Hike to Slow Down Indonesian Economic Growth

Economics & Macro

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Dzulfiqar Fathur Rahman 01/09/2022 17:40 WIB

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The government's plan to raise fuel prices is expected to slow economic growth.

Estimated Slowdown in Economic Growth Due to Fuel Price Hikes

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Bank Mandiri Research: Fuel Price Hike to Slow Down Indonesian Economic Growth

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Estimated Slowdown in Economic Growth Due to Fuel Price Hikes

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The government's plan to raise fuel prices is expected to slow economic growth. This price increase will lead to a surge in government-regulated prices and the prices of consumer goods and services in general.

PT Pertamina plans to raise the price of Pertalite, a 90-octane gasoline, to Rp10,000 per liter from Rp7,650 per liter. For Solar, the giant oil and gas company plans to increase its price to Rp7,200 per liter from Rp5,150 per liter.

Bank Mandiri's research estimates that the increase in Pertalite prices will slow economic growth by 0.17 percentage points. The increase will also contribute 0.83 percentage points to inflation.

Meanwhile, if the price of Solar increases to Rp8,500 per liter, economic growth is expected to slow by 0.07 percentage points, and inflation could be higher by 0.33 percentage points.

Although Bank Indonesia still has room to raise interest rates, the annual inflation rate at the end of 2022 is expected to reach 6% due to the increase in fuel prices, according to Bank Mandiri. This is higher than the baseline estimate of 4.6%.

Bank Mandiri maintains its projection of Indonesia's annual gross domestic product (GDP) growth at 5.17% for 2022.

Editor : Annissa Mutia

"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."

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Bank Mandiri Research: Fuel Price Hike to Slow Down Indonesian Economic Growth

Bank Mandiri Research: Fuel Price Hike to Slow Down Indonesian Economic Growth

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Related Data

Annual Inflation in Indonesian Provinces in November 2025, Riau Highest

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Bank Mandiri Research: Fuel Price Hike to Slow Down Indonesian Economic Growth

Bank Mandiri Research: Fuel Price Hike to Slow Down Indonesian Economic Growth

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Annual Inflation in Indonesian Provinces in November 2025, Riau Highest

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Trend in the Number of Stock and Other Securities Investors in Indonesia 2017-2024

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