Indef: Domestic Rice Supply Needs To Be Maintained To Prevent An Increase In Inflation Ahead Of Ramadan And Eid Al-Fitr

Illustration. (Photo: Doc. Antara)

JAKARTA - Executive Director of the Institute for Development of Economics and Finance (Indef) Esther Sri Astuti said that the government needs to maintain domestic rice supply so that there is no significant increase in inflation rates during Ramadan and Eid al-Fitr.

"It is important to maintain rice supply in Indonesia so that rice prices are stable and there is no sharp inflation, especially in the near future fasting month and Eid," said Esther Sri Astuti, quoted from Antara, Friday, March 1.

He stated that rice is a basic need for most Indonesians so that rice demand is inelastic.

"It means, no matter how much the price of rice goes up, people will buy it," said Esther.

However, if the increase in rice prices is allowed, according to him, this will encourage an increase in the price of other goods so that the inflation rate will spike sharply.

The Central Statistics Agency (BPS) noted that rice was a commodity that contributed to inflation in February 2024 with a share of 0.21 percent of monthly inflation (month-to-month/mtm) and 0.67 percent of annual inflation (year-on-year/yoy). Rice price inflation occurred in 37 provinces throughout February 2024.

BPS also stated that historically, rice contributed 0.02 percent mtm of inflation in Ramadan last year which fell in March 2023.