"In 2021, even though we were still in the midst of COVID-19, we were able to go through the difficult time. Most of the economic activity was declining, but we managed to get through it. Inflation was going well. Farmers' exchange rate (NTP) has also increased well, " Lutfi said during a virtual working meeting on Thursday.
However, 2022 may be the opposite of 2021, he said adding, the food price index from the Food and Agriculture Organization of the United Nations (FAO) has increased since February 2022.
"The index has increased by 140.7 points, or an increase of 20.7 percent compared to last year. And this is the highest figure since 2011, when the economic supercycle also happened, but the increase (at that time) was only 137.6 points," he said.
This means that the trading temperature is much higher than in 2011, the minister remarked.
Therefore, he said several indicators of an increase are becoming evident, for example, the price of vegetable oil, which rose by 201.7 points or by almost 27 percent at the beginning of 2022 compared to the previous year.
Apart from that, the issue of weather disturbances, supply chain disruptions caused by the pandemic, and most recently, the conflict between Russia and Ukraine still has the potential to pose a big problem in the future, Lutfi said.
"This is part of our challenge in 2022," he added.
Thus, with the ongoing COVID-19 pandemic, coupled with the Russia-Ukrainian conflict, the problems have become more complex, the minister said.
Russia's invasion of Ukraine has triggered economic sanctions from the United States and Europe, which are expected to end trade globalization, he added.
"Economic growth has fallen. US exports have fallen by minus 3 percent, and Europe has dropped two points, which causes this to become a direct link with Indonesia," he emphasized.
For this reason, Lutfi said, Indonesia is trying to resolve domestic problems, especially related to trade, which is connected to global conditions.
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Translator: Sella Panduarsa G, Resinta S
Editor: Sri Haryati
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