LPS Chief Executive Calls Digital Infrastructure Improvement Can Reduce High Economic Costs In Indonesia

Chief Executive of the Deposit Insurance Corporation (LPS) Lana Soelistianingsih (photo: dock. inter)

JAKARTA - Chief Executive of the Deposit Insurance Corporation (LPS) Lana Soelistianingsih said improvements in digital infrastructure can reduce high economic costs. The reason is, one of the causes of inflation is the existence of high distribution costs and intermediate costs, especially in the transportation sector. "Spatially equitable digitization distribution needs to continue to be encouraged to reduce high economic costs," Lana said in an official statement in Jakarta, Saturday, March 11. In addition, she continued, smooth channels for distribution of goods also need to be maintained to suppress inflation. From the results of empirical studies, provinces with high digitalization indexes followed by low levels of provincial inflation. Previously, inflation was still a challenge even though it had begun to decline. The increase in inflation, which was still quite high, came from the transportation and beverage food sectors. Furthermore, Lana explained about the existence of high consumer optimism towards the economy, where there was an improvement in consumer consumption as reflected from the confidence index that continues to be in an optimistic position. She also appealed, so that consumer optimism and the business world needs to be maintained to encourage consumption and investment. Low-end consumer optimism that has revenue of IDR 1 million to IDR 2 million is also at a high level.

"Meanwhile, the portion of consumer income used for consumption is now also above the average pandemic. The impact of uncertainty on domestic economic activity also needs to be managed properly", he explained, as quoted by Antara.Regarding the estimated improvement in business activities, Lana said that the results of the latest business activity surveys show the expectations of business actors about improving business activities in the first quarter of 2023. Along with strengthening these business activities, the job labor indicator has also begun to show an increase. Then regarding improvement in consumption indicators, public consumption is recovering because individual customers have returned to shopping. Individual storage has also increased by double digits due to the pandemic, where currently growth is normalized to 5 percent on an annual basis as of January 2023.