"It is still okay, but we must maintain the rate. Hopefully, it will not become a boomerang for our economic growth," Nazara remarked at the 2022 Central Development Coordination Meeting in Jakarta on Thursday.
As for next year, economic growth is targeted to increase between 5.3 percent to 5.9 percent, he informed.
Economic recovery in Indonesia is running well, he said. However, the scarring effect of the COVID-19 pandemic has continued to linger. Therefore, the business world will need time to bring production capacity back to pre-pandemic levels.
This scarring effect could lead to an increase in inflation, which must be addressed to avoid an increase in the price of goods and prevent hindering economic recovery, he emphasized.
"While we are observing the dynamics in the economic recovery, then the geopolitical conflict between Russia and Ukraine occurred," he noted.
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In light of these developments, the prices of several global commodities, such as natural gas, coal, crude oil, to palm oil (CPO), have increased tremendously and impacted the country, Nazara said.
The increase in global CPO prices has also raised the price of cooking oil in Indonesia, forcing the Indonesian State Budget to absorb the resultant shock, he added.
Besides Indonesia, Europe, the United States, Germany, and the United Kingdom have also recorded high levels of inflation, he informed.
"Although inflation in Indonesia has increased compared to 2020, we are grateful that over the last few months our development indicators are still on track, such as the spending index, Purchasing Managers’ Index (PMI) Manufacturing, electricity consumption growth, and others," he added.
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Translator: Agatha Olivia V, Resinta S
Editor: Rahmad Nasution
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