The Horror Of Inflation From Food Commodities Is Increasingly Visible, The Government Must Beware Of Rising Rice And Soybean Prices

Illustration (Photo: Doc. Antara)

JAKARTA - PT Bank Mandiri Tbk economist Dian Ayu Yustina said that the recent inflation rate was influenced by food price factors. According to him, the government and the central bank need to pay attention to these signals in order to keep domestic macroeconomic stability under control.

"We have tried to find out that some of these food commodities have a big enough role in increasing inflation," he said through an online channel on Wednesday, June 22.

Dian added that there are a number of foodstuffs that play a major role in the formation of inflation, both domestically and from abroad.

“Several of these commodities are soybeans, corn, and wheat which are showing rising prices. A real example is the increase in the price of soybeans that we import will cause an increase in the selling price in the country," he said.

“In addition, what we should pay attention to is the price of rice which has started to increase but not as sharply as the price of other commodities. The impact of this inflation (from food) is relatively faster," he continued.

On the same occasion, Bank Mandiri Chief Economist Andry Asmoro revealed that the company had made its own projections for the movement of inflation levels.

“Our calculation yesterday was that the baseline was 4.6 percent, but that amount includes the expectation of an increase in the price of metallurgy and electricity rates. But if both are not included, the estimated inflation will be at 4.2 percent," said Andry.

As previously reported by VOI, the inflation rate has consistently risen since the beginning of the year to 3.55 percent year on year (yoy) in May 2022.

Previously, inflation was recorded at 2.03 percent in February, 2.64 percent in March, and 3.47 percent in April.

The ideal inflation target maintained by the government and Bank Indonesia is 3 percent plus minus 1 percent. This means that the inflation rate at the end of the year will exceed the predetermined target.