Government Hopes Inflation Doesn't Rise Too Fast To Maintain Economic Recovery Momentum

Illustration (Photo: Doc. Ministry of Finance)

JAKARTA - The government through the Deputy Minister of Finance (Wamenkeu) Suahasil Nazara said that the current trend of rising inflation is one of the game changers in the national economy.

According to him, Indonesia's inflation rate, which is now at 4.9 percent year on year (yoy), is still relatively under control, especially when compared to other peer group countries.

“In our inflation, there are some prices that do seem to be increasing, especially food prices. We must be able to keep inflation from rising too fast so that the economic recovery can run as long as possible," he said in a press statement quoted on Wednesday, August 10.

Suahasil added that the main focus is now directed to the surge in volatile foods. For this reason, the government seeks to ensure the availability of smooth supply and distribution.

"We continue to make a series of efforts so that food production centers run well, especially during holidays, holidays, or other major holidays," he said.

Furthermore, Suahasil explained that several countries are now feeling the impact of rising commodity prices in the energy sector. However, in Indonesia, there are several energy components whose prices are determined by the government, such as electricity tariffs, 3 kg LPG, and fuel oil (BBM).

"This is very important because the price of this energy then has a repercussion effect on various kinds of economic activities and on the prices of other products," he asserted.

In response to these conditions, it is said that the government will continue to carry out a strategy to stabilize prices in the country to reduce pressure on the national economy.

"The government gets windfall revenue because commodity prices are rising, and this is partly used to pay for subsidies and additional compensation with a total of IDR 502 trillion," he explained.

Sri Mulyani's subordinates also hope that inflation will remain under control so that productive activities can continue while optimizing the State Budget as a shock absorber in maintaining people's purchasing power and also providing social protection.

VOI noted that the inflation rate has continued to experience an upward trend since February 2022. At that time, the inflation rate was in the range of 2.03 percent. Successively this number then swelled to 4.94 percent at the end of July 2022.

Meanwhile, the inflation target in the 2022 State Budget is 3 percent plus minus 1 percent for the whole year. This level was then corrected by the government to 3.5 percent to 4.5 percent at the close of 2022.

"So, while pouring out the state budget to deal with inflation, we must also make the state finances healthy by reducing the deficit to below 3 percent next year. This can have a good impact because we can reduce financing, which means that the amount of debt can be minimized,” concluded the Deputy Minister of Finance, Suahasil Nazara.