Jakarta –
The Central Statistics Agency (BPS) noted inflation 2023 is 2.61%. This figure is said to be the lowest in the last 20 years.
Executive Director of the Institute for Development of Economics and Finance (Indef) Tauhid Ahmad said that the inflation rate was too low, indicating that consumption levels were weakening.
“If we look at this low (inflation) since the last two quarters, or the second semester. I see that the trend is indeed a decline in people’s purchasing power, demand for goods and services tends to fall. This is indicated by the contribution of public consumption to the economy decreasing, ” said Tauhid to detikcomTuesday (2/1/2024).
The decline in consumption levels is also in line with the increase in prices of several commodities, especially food. So, when traders raise prices, people reduce consumption.
“People in the market raise prices and don’t even sell them. This causes the price increase to not be too significant, especially for (consumption) in the second semester,” he explained.
“People are not willing to buy goods that go up until the increase is accompanied by low purchasing power. Inflation is a factor in economic growth, but if it is too low, it is a weakness in our economy that indicates a decline,” he explained.
Then, Director of the Center of Economics and Law Studies (Celios) Bhima Yudhistira said that the low inflation in 2023 was because the price of non-subsidized fuel oil (BBM) rose gradually and there was pressure on the demand side which decreased compared to 2022.
“It can be seen from the core inflation of 1.8% yoy, much lower than December 2022 which reached 3.36%. Core inflation can reflect that aggregate public demand will still be low in 2023,” he said.
“The low core inflation indicator is also supported by the phenomenon of the middle class consuming savings to meet basic needs and the large number of people who depend on loans,” he added.
He also explained that if consumption levels are depressed, the impact will be on economic growth. Bhima predicts that it will be difficult for the Indonesian economy to grow by 5% and in 2024 it is projected to be lower, namely 4.9%.
“In 2024, the effect could even grow by an even lower 4.9%. It will reach an average growth of 7%,” he concluded.
Indonesia’s inflation is the lowest in 20 years. Check the next page.
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2024-01-02 10:06:48
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