Jakarta, CNBC Indonesia – Ahead of Ramadan which falls in April-May 2022, the war between Russia and Ukraine, as well as rising food and energy prices at the global level, coupled with government policies have made Indonesia’s inflation soar in March 2022.
Indonesia’s inflation in March 2022 crept up to a level of 0.66% in March 2022 compared to the previous month (month to month/mtm). This level was the highest since May 2019 when it reached 0.68%.
The former Minister of Finance of the Republic of Indonesia (2014-2016) under the reign of Joko Widodo and Jusuf Kalla revealed, in conditions where the economy is recovering, not only Indonesia, but also various parts of the world, inflation is a threat that must also be watched out for.
“We are dealing with the war between Russia and Ukraine, there is one threat that we must be aware of, the threat of inflation,” Bambang explained to CNBC Indonesia, Friday (1/4/2022).
“There is a tendency for inflation to be high, either due to rising commodity prices due to the war or disruptions to the production supply chain of various products,” Bambang continued.
High inflation is the source of all problems. High inflation rate can erode people’s purchasing power. The spike in inflation could also accelerate Bank Indonesia (BI) to raise its benchmark interest rate, followed by banks through their credit interest rates. This will obviously slow down the Indonesian economy, which is now recovering.
Therefore, according to Bambang, the solution is to provide availability and affordability of affordable prices for commodities that contribute to the largest inflation in Indonesia.
Bambang said that the biggest contributor to inflation in Indonesia was food, especially rice. Therefore, the price of food needs must be maintained.
“Rice and commodities that affect inflation must be strictly maintained so that availability can be reached by many people and does not cause speculation, so that ultimately prices rise and cause inflation,” he said.
“Focus is on commodities or products that contribute greatly to Indonesia’s current inflation. Because we must be aware of rising inflation in various parts of the world,” Bambang continued.
(cap/me)
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