Economics
More Rate Hikes Seen in Indonesia as Fuel Price Increase Looms
A fuel pump attendant at a roadside gas station in Jakarta, Indonesia.
Photographer: Adek Berry/AFP/Getty Images
This article is for subscribers only.
Bank Indonesia’s surprise rate increase on Tuesday may just be the first in a series of hikes as economists warned that higher fuel prices could tip inflation past 7% this year.
The central bank will need to deliver at least 50 basis points of policy rate increases for the rest of 2022 to catch up to inflation seen to breach its 2%-4% target this year and next, DBS Bank Ltd. economist Radhika Rao said. A sharp cut in energy subsidies will require larger hikes, she added.