Jakarta: Bank Indonesia (BI) Governor Perry Warjiyo pressed for intensifying market operations at the central and regional levels to bring down food inflation to six or even five percent (year-on-year/yoy), from 10.47 percent (yoy) in July.
"Let us immediately conduct market operations, so that the prices of chili, onions, eggs, and meat can go down. In this way, the price of cooking oil does not rise again," BI Governor Warjiyo noted at the start of the National Movement for Food Inflation Control that was monitored online here, Wednesday.
Warjiyo said that at the center, the matter was being coordinated, so that district heads and mayors could use the regional budget for market operations in the wake of several problems related to legal certainty.
Some district heads or mayors were apprehensive about using the budget for market operations.
As for the Consumer Price Index (CPI) inflation last month recorded at 4.94 percent (yoy), food inflation became the highest component, with an increase of 10.47 percent (yoy). In fact, food inflation should not exceed five percent or at most six percent.
Warjiyo noted that food inflation posed a problem for people and had direct implications for welfare, so it is not only an economic problem but also a social problem and has the potential to continue to become a political problem.
Food inflation constitutes 20 percent of the total public expenditure, while for the lower class, it can reach 40 or 50 percent or higher than the portion of the upper middle class.
"Hence, by lowering food inflation, from the level of 10.47 percent (yoy) to six percent (yoy) or five percent (yoy), the social impact will be huge in improving the welfare of the people," Warjiyo stated.
Hence, he stressed that the national movement to control food inflation could continually be encouraged through consistent cooperation between all parties, both at the center and the regions.
Indonesia's inflation rate was recorded at 4.94 percent year-on-year (yoy) in July 2022, thereby indicating that the condition was maintained well, Statistics Indonesia (BPS) head Margo Yuwono earlier noted.
Meanwhile, core inflation was recorded at 2.85 percent, which was also relatively low, he added.
"As compared to several (other) G20 countries, in particular, our inflation is still relatively under control," he remarked.
According to the latest inflation data from the Organisation for Economic Cooperation and Development (OECD), as of June 2022, Indonesia’s inflation had reached 4.4 percent yoy.
Meanwhile, inflation in South Korea, the United Kingdom, the United States, and the European Union was recorded at 6.1 percent, 8.2 percent, 9.1 percent, and 9.6 percent yoy, respectively.
“It illustrates that our economic fundamentals are still good,” the BPS head stated.
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