Oh Lord! RI Potentially Hyperinflation 12 Percent, Bamsoet: We Can't Be Neglected

Screenshot of the speech of the Chairperson of the MPR RI Bambang Soesatyo at the Annual Session of the MPR RI and the Joint Session of the DPR RI and DPD RI in 2022, Tuesday, August 16. (Photo: ANTARA).

JAKARTA - MPR Chairman Bambang Soesatyo (Bamsoet) said the government needs to pay close attention to the upward trend in inflation which has the potential to put additional pressure on the Indonesian economy.

According to Bamsoet, the upward trend in inflation does not only occur in Indonesia, but also in all countries in the world.

"Inflation can be a threat to the national economy, we must not be negligent," said Bamsoet at the 2022 MPR Annual Session at the Senayan Parliament Complex, Jakarta, Tuesday, August 16.

Bamsoet explained that the Central Statistics Agency (BPS) noted that Indonesia's inflation rate as of July 2022 was at the level of 4.94 percent, and in August it is predicted to increase in the range of 5 to 6 percent.

In fact, in September 2022, we are predicted to face the threat of hyper-inflation, with inflation rates in the range of 10 to 12 percent.

"The rate of rising inflation, accompanied by soaring food and energy prices, is putting more pressure on the people, who have just emerged from the COVID-19 pandemic," he said.

Bambang added that the spike in world oil prices in early April 2022 is estimated to reach US$98 per barrel.

This figure far exceeds the 2022 state budget assumption of US$63 per barrel.

On the other hand, he continued, the subsidy burden for Pertalite, Solar, and LPG has reached IDR 502 trillion.

"The increase in oil prices that are too high, of course, will make it difficult for us to seek additional subsidies, to reduce inflationary pressure. No country provides subsidies of that size," he asserted.

According to VOI records, the value of the energy subsidy (along with compensation) which is more than half a quadrillion is the result of the government's addition from the previous only around Rp. 100 trillion.