Minister of Finance (Menkeu) Sri Mulyani revealed that the high expectations of economic recovery emerged after three years of the COVID-19 pandemic.
According to him, the mobility of people who are gradually returning to normal brings their own hope after being forced to limit their activities in order to suppress the spread of the virus.
"Three years after the hibernation, we suddenly became confident in the discovery of the vaccine so that we could carry out activities again," he said in Jakarta on Monday, January 8.
Even so, the reality of recovery is not immediately in line with what is imagined. The Minister of Finance explained that there was a surge in demand that could not be fulfilled by the supply side.
Not all of them returned smoothly. Like many resorts that have opened but it is difficult to get employees. Then the container, because three years there was no traffic, many countainers are in various countries. So we can see where the demand is, where is the supply to the countaier," he said.
The state treasurer added that this picture then became more complicated with the absence of workers at the port. They just want to do what they want to do when they are paid more expensive.
It also triggers inflation as wages have to be increased to get people out of their cages. This is a combination of the number of goods, the number of requests, the number of services, and the increasing salary. This is happening in developed countries and triggering inflation," he said.
In fact, continued the Minister of Finance, policymakers estimate that inflation is only temporary in nature to reach the point of balance between supply and demand.
Recently, the situation has been exacerbated by the war factor in Ukraine which is increasingly disrupting the supply chain of global needs.
This is what the monetary authority is worried about. If rising inflation has become a (sustainable) trend, it will be very painful to lower it. This also explains why the Fed (US central bank) raised interest rates by 425 basis points in a year which is the highest and fastest in America in history," he said.
For information, the phenomenon of high inflation and even reaching double digits generally occurs in developed countries, such as Turkey, Britain and the US.
This condition makes the central bank aggressive by raising interest rates in order to reduce the rate of inflation.
Meanwhile, inflation in developed countries has been very low and has even experienced deflation. The central bank has also even implemented a negative interest rate to 'force' the deposited funds that are flooded to get out and use productive and consumptive activities that turn the wheels of the economy.
Indonesia itself in early 2022 set an inflation target at the level of 3 percent plus minus 1 percent. However, in its journey inflation jumped to 5 percent.
The government itself estimates inflation could return to normal range in the second half of 2023.
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