Manufacturing PMIs And Inflation Reductions Become Momentum For Strengthening Economic Recovery

Illustration (Photo: Doc. Ministry of Finance)

JAKARTA - The government through the Ministry of Finance (Kemenkeu) stated that currently there are at least two main factors that support the momentum of economic recovery.

Head of the Fiscal Policy Agency (BKF) of the Ministry of Finance, Febrio Kacaribu, said that the two factors were the Purchasing Managers' Index (PMI) of manufacturing which remained on the expansionary track and the decline in inflation in August 2022.

According to him, last month's manufacturing PMI was recorded to be at the level of 51.7 or better than the position in July which was 51.3. This slick score makes the national industry in the expansion zone because it exceeds 50.

"This growth is driven by both an increase in new demand and an increase in output," he said in a written statement on Friday, September 2.

Febrio added that the government will continue to strive to keep this momentum stable so that the manufacturing sector remains able to support the continued economic recovery amid global uncertainty today.

Other good achievements include the level of employment that continues growth and input prices and declining output costs. Overall, business sentiment in the manufacturing sector of Indonesia remains positive amid the hope of continuing the recovery of domestic demand," he said.

Furthermore, the second factor is the August inflation book of 4.69 percent from the previous 4.94 percent in the July period. Despite shrinking, Sri Mulyani's ranks assessed that there had been an increase in core inflation to 3.04 compared to initially 2.86 percent.

He explained that the increase in core inflation occurred in almost all groups of goods and services, such as clothing, housing services, education, recreation, and the provision of food and beverages/restaurants.

"The increase in education inflation occurred in line with the entry of the new school year as well as showing a stronger recovery in people's purchasing power," he said.

Meanwhile, for the volatile food inflation (volatile food), which in the past period was quite dominant, was known to have decreased from 11.47 percent to 8.93 percent.

"In the future, coordination and synergy with local governments are needed to overcome the risk of inflation going forward," he stressed.

Furthermore, Febrio also revealed that the government will continue to ensure the smooth supply and distribution factor, especially for energy and food.

Various budgets that can contribute to controlling inflation in the regions are Transfer Funds to Regions and Village Funds (TKDD) for food security as well as road, bridge construction, and others which are expected to facilitate the supply and distribution of goods. In terms of demand, the government will strengthen collaboration with the relevant authorities, close Febrio.