The Government's Efforts To Increase Public Consumption Are Successful

Main Expert Staff of the Presidential Staff Office (KSP) Edy Priyono/Photo: Antara

JAKARTA - The Main Expert Staff of the Presidential Staff Office (KSP) Edy Priyono said that various government efforts have increased household consumption which has also driven strong economic growth in the first quarter of 2022 to 5.01 percent on an annual basis (year on year / yoy).

But on the other hand, KSP also said that there was indeed an increase in the price of basic commodities which was influenced by global economic uncertainty.

"Despite the increase in the prices of basic necessities, from the demand side, household consumption actually grew, which was 4.34 percent year on year, or much higher than the growth in the fourth quarter of 2021 which was 3.55 percent. percent (year to year)," said Edy in Jakarta, Tuesday, May 17. Edy's statement was related to the issue of prices for basic necessities in the domestic market, which according to the Political Indicator Survey on Sunday, May 15, had lowered the level of public satisfaction with the performance of President Joko Widodo's government. Widodo and Vice President Ma'ruf Amin.

Edy claimed that the strong growth in household consumption was supported by the government's policies to loosen people's mobility, in line with the controlled pandemic and the acceleration of COVID-19 vaccination.

"And what must be noted, is also due to the acceleration of the distribution of social protection to provide an impetus for strengthening people's purchasing power," he said.

However, he warned, strengthening household consumption could also contribute to rising inflation. In April 2022, inflation was recorded at 0.95 percent on a monthly basis (month to month) or 3.47 percent on an annual basis (year to year).

"The high inflation also coincides with the moment of Ramadan 2022, which cyclically increases demand," he explained.

KSP is still optimistic that the Indonesian economy in the future will remain strong because the government is committed to accelerating COVID-19 vaccination, expanding the opening of economic sectors, and providing various stimuli in the form of social assistance to the community.

Regarding the increase in the price of basic commodities, according to Edy, it cannot be separated from the global situation such as the ongoing COVID-19 pandemic, the Russia-Ukraine conflict, the normalization of policies of developed countries, to changes in the weather. Due to global uncertainty, the prices of various commodities in rising global markets, including food and energy which ultimately trigger price increases in many countries.

"If this condition continues, it could lead to an increase in inflation, a decrease in people's purchasing power, and economic growth, as well as provide fiscal pressure considering that the State Budget is mostly used to provide social support for the community, especially the poor," said Edy.

In addition, the monetary policies of developed countries have also put pressure on financial markets. This could result in fluctuations in the rupiah exchange rate as well as the potential for higher interest rates on the financial market.

Edy ensured that the government would continue to optimize the state budget to provide social assistance to reduce the impact of global uncertainty on society, especially the poor.

The Political Indicators survey institute, Sunday (16/5), revealed a survey which stated that public satisfaction with the performance of President Joko Widodo - Vice President Ma'ruf Amin decreased six percent to 58.1 percent. The decline occurred one month after the last survey which stated that public satisfaction was 64.1 percent. The drastic decrease was said to be due to the increase in the price of basic commodities.