MACROECONOMIC ANALYSIS SERIES: BI Board of Governor Meeting, March 2022

The global economy was not particularly in good condition recently. The uneven domestic demand recovery, continuation of supply chain disruption, and energy shortage in various parts of the world have created an inflation
problem that serves as a hiccup to Covid-19 economic recovery. The outbreak of war served as fuel to the flame of current global economic issues, especially inflation, as it triggers the rapid rise in energy and food commodity prices. On a global level, the current economy is facing health and war crisis at the same time. On domestic prospects, fortunately, the impact of recent global development is relatively benign at the moment. However, the risks of future inflation driven by the upcoming Ramadan period, relaxation of social restriction, rising energy and food prices will
put policymakers, especially BI, in a tough position ahead. Thus, keeping the policy rate at 3.50% shall be appropriate.

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