BI Board of Governor's Meeting, August 2022

Jahen Rezki, Syahda Sabrina (), Nauli A. Desdiani (), Teuku Riefky, Amalia Cesarina, Meila Husna () and Faradina Alifia Maizar ()
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Syahda Sabrina: Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)
Nauli A. Desdiani: Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)
Meila Husna: Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)
Faradina Alifia Maizar: Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)

No 202208, LPEM FEBUI BI Board of Governor Meeting Brief from LPEM, Faculty of Economics and Business, University of Indonesia

Abstract: A midst a bleak outlook for global growth and elevated inflation level everywhere, Indonesia's economy has shown a more optimistic attitude in the remainder of the year. The economy grew by 5.44% (y.o.y) in Q2-2022, better-than-expected and well above many consensus. Core inflation remained relatively benign compared to headline inflation, although we projected the trend will be going upward. From external side, the aggressive move by the Fed provoked a wider rate differential, resulting in the capital outflow from emerging markets. Fortunately, it did not appear in Indonesia this month due to the positive market sentiment toward domestic fundamentals, particularly after the published growth of the second quarter has amplified the capital inflows into domestic financial market. As a result, Rupiah strengthened in mid-August to a level of around IDR14,800. Therefore, we see that BI still have some room to hold its policy rate at 3.50% this month to support external resilience while maintaining macroeconomic and financial system stability.

Keywords: gdp; —; economic; —; economic; outlook; —; inflation; —; macroeconomics; —; interest; rate (search for similar items in EconPapers)
Date: 2022-08, Revised 2022-08
New Economics Papers: this item is included in nep-des and nep-sea
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