Entrepreneurs are starting to worry about inflationary pressure hitting the Indonesian economy

Jakarta, CNN Indonesia —

A businessman start worrying about the phenomenon smoke which has hit Indonesia for the five consecutive months.

They worry that deflation is a sign that people’s purchasing power is weakening.

The General Chairman of the Indonesian Employers’ Association (Apindo) Shinta Kamdani explained that the phenomenon of inflation cannot be seen only from one side, but it is also necessary to look at its impact on purchasing power.

“I don’t think we’ll see deflation like that as it is just decomposing. “So it is clear that this was expressed earlier, there is an intervention from the government because we are suffering from the volatility of food prices which is the main problem,” he said when he met at Menara Kadin , South Jakarta, Wednesday (2/10).

“What worries us is that all this affects purchasing power, this is the main thing,” said Shinta.

According to him, this is also reflected in Indonesia’s manufacturing Purchasing Managers’ Index (PMI), which is still in the contraction phase in August 2024.

Referring to the S&P Global news, Indonesia’s manufacturing PMI was 49.2 in September, an increase compared to August 2024 which was 48.9.

Seeing this, Shinta believes that the country’s manufacturing performance is highly dependent on the performance of the domestic market, where domestic demand is greater than international demand.

“Therefore, we appreciate what the government has done so far to be able to encourage and develop domestic industry. But it is obvious that this request has an impact on the performance of our current manufacturing ,” he explained.

In addition, Shina saw that business development and downstream was the homework (PR) that all parties had to do.

Then, he said, Indonesia must be competitive in terms of operating costs. This is because costs for personnel, energy and logistics in Indonesia are one of the highest in ASEAN.

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“How can our products enter the global supply chain. So this is something for our homework, that we can improve the productivity of existing products so that the they can enter the global market network,” concluded Shinta.

The Central Bureau of Statistics (BPS) noted that Indonesia experienced inflation of 0.12 percent per month in September 2024.

BPS Acting CEO Amalia Adinggar Widyasanti said that this is the fifth consecutive recession in 2024. This situation occurred because there was a decline in prices.

“It is seen that the decline that has occurred in the last five months has been helped by the decline in the prices of volatile commodities,” he said at a press conference at the BPS office, Central Jakarta, Tuesday (1/10).

He said that the inflation in September 2024 will be the worst in the last five years of the presidency of President Joko Widodo (Jokowi).

“Historically, the deepest inflation in September 2024 compared to the same month in the last five years, with an inflation rate of 0.12 percent (month to month / mtm),” he said .

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