Airlangga Claims Indonesia's 2023 Inflation Is Lower Than 2000

Coordinating Minister for Economic Affairs Airlangga Hartarto. (Photo: Doc. ANTARA)

JAKARTA - The achievement of inflation in 2023 was recorded at 2.61 percent (yoy) or decreased compared to the realization in 2022, which was 5.51 percent (yoy).

Furthermore, outside of the pandemic-affected period (2020-2021), the realization of inflation is the lowest since 2000.

Coordinating Minister for Economic Affairs Airlangga Hartarto said Indonesia's inflation achievement in 2023 was maintained stable and under control in the target range of 3 percent plus minus 1 percent.

"This achievement cannot be separated from the strong coordination and synergy of various parties through TPIP-TPID in controlling price fluctuations amidst high uncertainty, one of which is weather disturbances from El Nino. In addition, this achievement is also better than the realization of inflation in a number of countries that are still above their target," he said in his official statement, Thursday, January 4.

According to Bloomberg, several countries that are still experiencing inflation above target include the Euro Area (2.4 percent yoy), Japan (2.8 percent yoy), the United States (3.1 percent yoy), South Korea (3.2 percent yoy), Germany (3.2 percent yoy), England (3.9 percent yoy), Russia (7.5 percent yoy), Turkey (62.0 percent yoy), and Argentina (160.9 percent yoy).

Airlangga said that the development of inflation in December 2023 was influenced by the movement of all components of inflation.

The government regulates price components (administered prices/AP) to experience inflation of 0.39 percent (mtm), or 1.72 percent (yoy).

On a monthly basis (mtm) and annual (yoy), air transportation rates, filter kretek cigarettes, and white kretek cigarettes are commodities that contribute to IHK inflation in December 2023.

Meanwhile, the core component experienced inflation of 0.14 percent (mtm), or 1.80 percent (yoy).

Annually, core inflation is still maintained even though it is in a sloping trend.

Based on the records of Trading Economics, the realization of Indonesia's core inflation is one of the lowest, which is ranked 10th out of 86 countries.

Food price component volatile (volatile food / VF) has increased by 1.42 percent (mtm) or 6.73 percent (yoy).

Airlangga said the weather disruption caused food production, especially rice and various chilies, to be not optimal.

This encourages an increase in rice and chili prices, which makes the two commodities the main contributors to inflation throughout 2023.

Throughout 2023, the Government continues to strive to maintain the availability of food supplies and maintain price affordability. This policy is carried out, including through strengthening government food reserves, especially rice, distributing medium rice through the Food Supply and Price Stabilization (SPHP) program, as well as distributing rice food aid.

As of December 31, 2023, CBP was maintained at 1.3 million tons, in accordance with the Government's target at the level of 1.2 million tons.

Meanwhile, the distribution of SPHP until December 30, 2023 reached 1.2 million tons or 110.3 percent of the target.

Furthermore, as of December 30, 2023, the distribution of rice food assistance in order to maintain the purchasing power of the poor and vulnerable for the September-December period itself has been distributed amounting to 852.33 thousand tons or 99.82 percent of the target.

The government also implements a food mobilization program through food distribution facilitation.

Food commodities that have been realized are 2.54 thousand tons, with the most realizations in corn, soybean and rice commodities.

The government also implemented a massive program of the Cheap Food Movement (GPM) coordinated by the National Food Agency at 1,626 locations in 36 provinces and 324 districts/cities.

Meanwhile, similar programs such as the Cheap Market Operation have also been implemented by 448 Regional Governments to withstand price fluctuations in the regions.

Airlangga conveyed that various policy programs synergized by the Government (Center and Regions) were able to withstand further increase in food prices.

In the future, the government will continue to be aware of and monitor domestic and global phenomena that can have an impact on inflation.

"Amid the various challenges faced today, including the increasingly stringent inflation target, commitment and synergy with all parties, both the Central Government, Regional Government, and Bank Indonesia will continue to be strengthened in order to keep inflation stable and under control within the target range," Airlangga concluded.