Commission XI Of The House Of Representatives Warns That Inflation Will Still Overshadow The 2023 State Budget

Member of the Indonesian House of Representatives Commission XI Kamrussamad. (Photo: Doc. Antara)

JAKARTA - Member of the Indonesian House of Representatives Commission XI Kamrussamad warned that inflation will overshadow the 2023 State Budget due to the high global economic turmoil as stated by President Joko Widodo (Jokowi) in his speech delivering the 2023 APBN Bill and Financial Note.

“Inflation is a serious scourge at the global level. Inflation anxiety has become a ghost for the world economy, from America to Europe and of course Indonesia," he said after his speech on the State Budget Bill and Financial Note at the MPR/DOR Building, Jakarta, quoted from Antara, Tuesday, August 16.

He said the global economy was battling sharply rising inflation, including the world's leading central banks have been aggressively raising interest rates.

“I see this interest rate will continue to rise until inflation is under control. This means that the threat of inflation will continue to haunt our 2023 State Budget," said the member of the Indonesian House of Representatives from the Gerindra faction.

Kamrussamad said that in July 2022 the United States Bureau of Labor Statistics announced that inflation in Uncle Sam's country had soared again. The Consumer Price Index broke 9.1 percent on an annual basis and the figure toppled May's inflation record, which made it the highest inflation rate since 1981.

"The same situation also occurs in Indonesia. BI and the Ministry of Finance noted that currently food inflation is 10.47 percent," he said.

He also suggested that his government anticipate rising prices for basic public needs and transportation because it will have an impact on rising food and energy prices as well as inflation.

Meanwhile, President Jokowi in the Bill on the State Budget for Fiscal Year 2023 and the Financial Note at the Plenary Meeting of the DPR RI stated that Indonesia's inflation rate is still far more moderate than other countries. As of July, Indonesia's inflation rate was 4.9 percent (yoy). This is supported by the role of the state budget in maintaining the stability of energy and food prices.

For 2023 inflation will be maintained at around 3.3 percent and the APBN policy will still be directed to anticipate inflationary and external pressures, especially energy and food inflation.

"The assumption of inflation at this level also illustrates the sustainability of the demand side recovery, especially due to the improvement in people's purchasing power," said President Jokowi.