Channel News Asia (CNA) are reporting that on May 19, the Indonesian parliament approved a request to increase energy subsidies by over USD 23 billion to maintain some sort of stability at a time of a global surge in inflation.
Additional energy subsidies worth over USD 5 billion were also approved, as was IDR 275 trillion for Indonesia’s state energy firm Pertamina and PLN.
Maybank Indonesia economist, Myrdal Gunarto, called the budget changes “very good news” as it supports purchasing power, predicting inflation in 2022 will reach 3.99-percent and economic growth could still top 5-percent.
“We hope Bank Indonesia as the monetary authority will be more moderate in terms of raising interest rates, which will mainly respond to the global trend of higher interest rates,” he said. Meanwhile Indonesia’s central bank, Bank Indonesia (BI) has said its monetary tightening path will take into account the government’s subsidy and energy price policy.
Original story from Channel News Asia