Tidal Inflation Down In The Middle Issues Of An Increase In Subsidized Fuel Prices, What's Wrong?

Illustration (Photo: Doc. Antara)

JAKARTA The inflation rate throughout August 2022 is known to decrease to 4.69 percent year on year (yoy) compared to July 2022 which was 4.94 percent.

In a report by the Central Statistics Agency (BPS) today, it was stated that last month there was deflation in 70 cities from 90 main cities which became the reference for calculations. This condition contrasts when looking at the previous period (July) recorded that all cities experienced inflation.

Head of BPS Margo Yuwono explained that the deflation occurred due to a price reduction shown by the decline in the indexes of several expenditure groups, namely food groups, beverages and tobacco, transportation, as well as information groups, communication, and financial services.

Meanwhile, the expenditure groups that experienced an increase in the index were clothing and footwear groups, housing, water, electricity, and household fuels, equipment groups. Then, equipment and routine maintenance, health, recreation, sports, and culture, education of personal care groups and other services.

"The inflation rate for the calendar year or January to August 2022 is 3.63 percent," he said through a virtual channel on Thursday, September 1.

Meanwhile, the core inflation rate posted an increase to 3.04 percent yoy in August 2022. This amount is higher than July 2022 which was 2.86 percent. Please note that core inflation is the main reference in reading requests from the public. This instrument is also one of the benchmarks for central banks to establish a policy of reference interest rates.

Furthermore, the VOI records revealed that the trend of rising inflation since the beginning of this year was broken last August. Previously, in February inflation posted a level of 2.03 percent. That figure consistently grew to its peak in July with 4.94 percent.

The decline in inflation seems to open up a little space for the government to raise the price of subsidized fuel oil (BBM) which is now getting more and more widely heard. With the slight level of inflation, economic pressure due to the increase in fuel prices can also be minimized.

For information, the government in the 2022 State Budget Law set the inflation target this year at 3 percent plus minus 1 percent. In its development, the government began to be realistic by revising the 2022 inflation target to a maximum of 4.5 percent.