Inflation And Deflation Must Be Controlled Immediately So That Prices Are Stable

President Joko Widodo when delivering information after leading the TNI's 79th Anniversary Ceremony in the Monas area, Central Jakarta, Saturday (5/0/2024). (DOC. ANTARA)

JAKARTA - President Joko Widodo (Jokowi) emphasized that deflation and inflation should be controlled together so as not to harm all parties.

"Whatever is called deflation or inflation, both must be controlled so that prices are stable, do not harm producers, can farmers, can fishermen, can be MSMEs, can be manufacturers, but also from the consumer side so that prices do not increase," said President Jokowi, ANTARA, Sunday 6 October.

The President responded to the deflation that occurred during the five not in a row as reported by the Bada Central Statistics (BPS).

Jokowi requested that further inspection of the deflation be carried out, whether it was due to a decrease in the price of goods or indeed reduced people's purchasing power.

"Try to check properly, the deflation is due to the decline in the prices of goods, because the supply is good, because the distribution is good, because there are no obstacles in transportation or because there is a reduced purchasing power. Control is what is needed, balance is what is needed," said the President.

The President also mentioned that the annual inflation (year-on-year/yoy) in September 2024 was 1.84 percent which he considered to be good.

"We are currently at the last year-on-year inflation is approximately 1.8, good, but don't let it be too low so that producers don't get harmed, so that farmers who produce do not get harmed. That maintains a balance that is not easy and we will continue to try," said the President.

Previously, Minister of Finance (Menkeu) Sri Mulyani Indrawati believed that the deflation that had occurred for five months in a row was not a negative signal for the economy.

This is because deflation is caused by volatile food components related to food commodities. With food deflation, the price of food ingredients in the market is stable or even decreasing.

"The deflation of the last five months has mainly contributed to the decline in food prices. In my opinion, this is a positive development, especially for people's purchasing power," said Sri Mulyani at the Ministry of Finance office, Jakarta, Friday (4/10).

He said public spending, especially the lower middle class, was dominated by food spending. This means that food prices in the market that have decreased can actually help people reach foodstuffs more cheaply.

BPS noted that the Indonesian economy experienced a deflation of 0.12 percent (month-to-month/mtm) in September 2024. This deflation trend has been going on since May 2024, with details of deflation of 0.03 percent in May, 0.08 percent in June, 0.18 percent in July, and 0.03 percent in August.

Meanwhile, annual inflation was recorded at 1.84 percent (year-on-year/yoy) and inflation for calendar year 0.74 percent (year-to-date/ytd).