The Cause Of Indonesia's Inflation Is 2.61% Lowest In 20 Years And The Impact

YOGYAKARTA Central Statistics Agency (BPS) revealed that Indonesia's inflation in 2023 was 2.61 percent year on year (yoy). This figure is the lowest in history in the last 20 years. Then what is the cause of Indonesia's inflation of 2.61%?

Acting Head of the Central Statistics Agency Amalia A. Widyasanti said that Indonesia's inflation in 2023 is a record. However, this record does not include inflation for the 2021 pandemic period. He revealed that Indonesia's inflation in 2023 was due to the tendency to decrease core inflation in 2023.

In December 2023, the annual core component experienced inflation of up to 1.80%. Based on BPS data, the component contributed 1.1%. Core inflation this December was recorded to be lower than the previous three months, namely in November it was 1.87% while in October it was 1.91%, and in September it was 2.00%.

This year, the price regulated by the government or administrative prices has also decreased quite drastically compared to September in the previous year. This is because there is no increase in fuel prices in 2023.

As for the volatile price component, inflation is relatively fluctuating. These conditions are caused by many external factors, especially due to weather impacts including the El Nino phenomenon

"However, if you look at its contribution from January to December, it can be seen in a downward trend. The role of all stakeholders is of course various stakeholders, very significant in efforts to control inflation so that inflation in Indonesia is relatively low compared to other countries. and our inflation in controlling is quite good," explained Amalia through the release of official statistical news (BRS), Tuesday. January 2, 2024.

When viewed from the expenditure group, inflation in housing, water, electricity and household fuels and transportation is also lower this year.

"Once again, it needs to be informed that there is a base effect. Why is inflation in 2023, lower than 2022," he explained again.

In addition, another factor that has an effect is the existence of coordinated and structured efforts between the Government, Bank Indonesia (BI), and stakeholders in order to maintain inflation. This is one of the factors why the Government has succeeded in curbing the inflation rate in Indonesia.

"Ensuring a maintained supply and good distribution are the keys to Indonesia's success in maintaining inflation within the target range," he said.

Quoted from the Bank Indonesia website, inflation is an increase in the price of goods and services in general, which occurs continuously in a certain period of time. The increase in some goods and services cannot be said to be inflation, only if the increase occurs widely.

To keep the economy stable, inflation must also be maintained so that it is not too high and not too low. High inflation is feared to make the prices of goods and services unaffordable by the public.

Citing bi.go.id, low and stable inflation is important for economic growth which leads to an increase in people's welfare.

In 2023, the inflation achievement that was recorded was below the set target of 2% to 4%.

That's information related to the cause of Indonesia's inflation 2.61%. Visit VOI.ID to get other interesting information.