LPEM UI Says High Inflation Triggered By Government's Decision To Allow People To Go Home

Illustration (Photo: Doc. Antara)

JAKARTA - The Institute for Economic and Community Research (LPEM) of the University of Indonesia stated that the inflation rate in April 2022, which was 3.47 percent year on year (yoy), was a fairly high level.

LPEM UI researcher Chaikal Nuryakin said that the figure was up 0.83 percent compared to April 2021. According to him, last month's inflation score reflected that people's mobility had improved considerably and was close to normal conditions.

In fact, the government's strategic policies during the Ramdan period also contributed significantly to the formation of the inflation rate.

"The high inflation is allegedly caused by the government which has allowed people to carry out homecoming, as well as external pressures such as rising food and energy prices," he said in an official release on Thursday, May 12.

Chaikal added that the current situation also affected the purchasing power of the people, which had not yet fully recovered.

"This trend strengthens the price component that is regulated by the government as the main driver of inflation in Indonesia, especially with the people's purchasing power is still weak," he said.

As previously reported, the increase in inflation was shaped by expenditure groups for food, beverages, transportation, restaurants, personal care and other services.

Meanwhile, some commodities that experienced price increases include cooking oil, granulated sugar, live chicken, filter kretek cigarettes, beef, chicken eggs, purebred chicken, household fuel, gasoline, air transportation fares, oily pastries, rice with side dishes, and bottled water.

"April inflation of 3.47 percent is the highest since May 2020, where core inflation is at 2.65 percent yoy," he stressed.

On the other hand, the price component regulated by the government increased by 4.85 percent yoy. These movements signal a re-acceleration of inflation for the government-regulated price component, which has occurred since the middle of last year.

"A sharp increase also occurred in the volatile price component with 5.48 percent yoy or the highest in two years," concluded Chaikal.