The Rise of Inflation: Will The Hawk Come?

According to the central bank's consumer survey, consumers are less confident about making purchases. The Consumer Confidence Index in July 2022 was 123.2, remaining in the positive zone (index >100), but down from 128.2 the previous month.

Consumers should anticipate a reduction in energy costs in the following months. This relief has already begun fuel prices, which are determined by the worldwide market and are based on oil refining costs, have fallen for more than 50 days in a row.

The average price of a gallon of gas is $4.06 as of Aug. 8, a significant drop from a high of more than $5 in June. This will benefit not only the government, which will receive subsidies, but also companies whose products require gasoline.

Looking at data and history, we shall see that the hawk will come. Indicators are looking good for Indonesia, and the central bank seems very careful in implementing their monetary policies. Despite the tightening of monetary policy by central banks all around the world, Bank Indonesia seems to not get affected due to their ability to stick with their monetary policy framework.

References:

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Chang, E. (2022, August 9). When will inflation go down? Forbes. Retrieved August 19, 2022, from https://www.forbes.com/advisor/personal-finance/when-will-inflation-go-down/#:~:text=A%20July%20analysis%20by%20supply,inflation%20cycle%2C%E2%80%9D%20he%20says. 

Freight rates declining in 2022 in the face of uncertainties . The Maritime Executive. (2022). Retrieved August 19, 2022, from https://maritime-executive.com/article/freight-rates-declining-in-2022-in-the-face-of-uncertainties 

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Mahabarata, Y. (2020, August 19). Learn from the first recession in the Republic of Indonesia. VOI. Retrieved August 19, 2022, from https://voi.id/en/memori/11671/learn-from-the-first-recession-in-the-republic-of-indonesia 

Nikkei Asia. (2022, July 1). Indonesia inflation rate climbs to 5-year high of 4.35% in June. Nikkei Asia. Retrieved August 19, 2022, from https://asia.nikkei.com/Economy/Indonesia-inflation-rate-climbs-to-5-year-high-of-4.35-in-June 

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