Encourage Local Governments To Keep Hard Work By Inflation, The Government Gets Regional Incentive Funds

Illustration (Photo: Doc. Ministry of Finance)

JAKARTA - The government through the Head of the Fiscal Policy Agency (BKF) of the Ministry of Finance, Febrio Kacaribu, said that it will continue to monitor the inflation rate which has reached the level of 5.95 percent year on year (yoy) in September 2022.

According to him, the record last month was driven by the government's policy of adjusting the price of fuel oil (BBM). For this reason, he invites all parties to participate in controlling inflation.

One way is to provide Regional Incentive Funds (DID) for local governments that have succeeded in making inflation in their regions slop.

"The DID given to local governments has proven effective in encouraging regions to work harder in controlling inflation in their regions," he said in an official statement on Wednesday, October 5.

Ferbrio explained that volatile food inflation (volatile food) slightly increased to 9.02 percent from the previous 8.93 percent in August. This was driven by the still abundance of horticultural food stocks, cooking oil, and fish so as to withstand higher-up inflation.

However, the price of rice has increased slightly over the planting season. On the other hand, the deflation of shallots and red chilies contributed to the maintenance of volatile food inflation.

The government is taking various mitigation measures to maintain the availability of food commodities supply and smooth distribution so that food inflation remains under control. This is proven to provide good results so that the use of various budgets such as food security budgets and infrastructure budgets," he said.

Furthermore, it also explained that core inflation in September 2022 increased at a moderate level of 3.21 percent from August by 3.04 percent. The increase in core inflation occurred in almost all groups of goods and services, such as clothing, housing services, education, recreation, and the provision of food and beverages/restaurants.

"The increase in core inflation reflects the overall increase in domestic demand in line with the improving conditions of the pandemic," he said.

Then for price inflation regulated by the government (administed price), it is known to increase to 13.28 percent (August 6.84 percent) driven by fuel price adjustment (gasin and diesel). As a propagation, there is an increase in public transportation rates, online transportation, and bus fares.

Inflation donations from rising fuel prices are smaller than the government's estimate. The potential for price increases has also been anticipated with the distribution of additional social assistance, both in the form of direct cash assistance and wage subsidy assistance," closed Febrio.