JAKARTA Indonesia’s central bank governor (BI) says that monetary tightening at home could cause the country’s annual economic growth to slow to 4.37 percent next year.
At the policy meeting last week, BI kept its upward-biased outlook for 2022 GDP growth of between 4.5% and 5.3%.
BI Governor Perry Warjiyo gave the GDP estimate during a meeting with the parliament to talk about the central bank’s budget for 2023.
The unpredictability of the global economy, according to Warjiyo, makes it impossible to predict economic figures. He said that lawmakers might further discuss the data.
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At the hearing, the governor also predicted that the overall inflation rate will be 6.11% by the end of 2022 and 3.61% by the end of 2023. In his presentation, he showed the inflation rate that BI thought would happen in the year 2022 as of November 3.
Last week, Warjiyo said that BI thought that the overall rate of inflation would be 5.6% by the end of the year.
He did not provide an explanation for the discrepancy in the numbers, and a request for comment from the BI spokeswoman was not promptly answered.
The key policy rate was increased by BI last week for a fourth consecutive monthly meeting in an effort to lower inflation expectations, which the governor claimed were “too high.” Since August, BI has raised interest rates a total of 175 basis points.
Although it decreased from a seven-year high of 5.95% in September to 5.71% in October, Indonesia’s annual headline inflation rate remained close to that level.
The target inflation rate for BI is between 2% and 4%.
Dody Budi Waluyo, the deputy governor of BI, predicted on Friday that inflation may slow down even more this month to 5.5%.
On November 30, Warjiyo is likely to talk about BI’s policy recommendations for 2023 at an annual meeting with people in the financial world.