BI’s three policy ammunitions to safeguard the economy and battle global stagflation

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Bank-Indonesia
Bank Indonesia. (IO/Almatin Abbas)

Jakarta, IO – BI senior deputy governor Destry Damayanti revealed measures by Bank Indonesia (BI) to protect the domestic economy from the risk of stagflation risk, where spiking inflation outpaces economic growth.

He said BI is well aware of the inflationary pressures and the impact of global inflation trend that will overshadow the Indonesian economy going forward. In 2022 inflation is expected to surpass BI’s target at maximum 4% but in 2023 it is forecasted to return to 3% plus minus one.

“We will use all the policies we have,” he told CNN Indonesia, Tuesday (28/6).

Destry explained that BI will take three measures to prevent the impact of stagflation. First, by keeping the core inflation below 3% from currently 2.6% while headline inflation hit 3.55% in May.