Inflation in 2017 will Reach 4.5% due Government Discretion and Gobal Trend

Samuel sekuritas analyst predicted the inflation rate in 2017 can reach 4.5% rate year on year which will be presumably starting at the beginning of april 2017. 

The analyst prediction is based on the drastic cuts of fuel prices in april 2016. The government cut off the subsidy for lowest fuel category premium which will lay impact on inflation rate meanwhile the outlook of commodity of oil crude which is not in stability becoming the main factor of high inflation in 2017. Although the inflation projection is trimmed, the BI rate is still  maintain at rate of 5 percent. 

According to analyst of samuel sekuritas, global economy turbulence like brexit case and the issue of hike speculation of FED rate in fourth quarter 2016 hinders the drastic monetary easing by Bank of Indonesia ( BI).

Meanwhile another internal factor that cause the inflation is the policy of government to increase the tobacco tax, the CPI of weights of goods by 1.5% and the trim of subsidy electricity 900 kv removal by the government.