As our (public) consumption has not fully recovered, we must be prepared for a shortfall in the people's purchasing power after Eid al-Fitr festivities if the administered prices are raised.
Jakarta (ANTARA) - The Institute for Development of Economics and Finance (Indef) has asked the government to suspend any increase in the administered prices of fuel oils and electrical power to achieve 5.2-percent economic growth this year.

"We should suspend (any increase in) the prices of energy, such as LPG, pertalite gasoline, and electricity, as well as several basic commodities as far as we can. If we can do that, we will most likely be able to achieve 5.2-percent economic growth year on year (you) in 2022," Indef vice director Eko Listiyanto said at an online press conference on Wednesday.



The increase in the prices of basic commodities, such as foods, beverages, drinking water, and household fuel, indicates that public consumption has begun to recover compared to when the COVID-19 transmission rate was high, he added.



“So, the effort to handle the pandemic has improved the people's purchasing power," he remarked.



However, the increase in the prices of basic necessities, which pushed inflation to 3.47 percent yoy in April this year, should be accorded attention so as not to impact the people's purchasing power that has yet to fully recover, he said.



Household consumption grew by 4.34 percent yoy in the first quarter of 2022 after contracting during the same period of last year, he noted.



"As our (public) consumption has not fully recovered, we must be prepared for a shortfall in the people's purchasing power after Eid al-Fitr festivities if the administered prices are raised," he said.



The consumer confidence index (IKK) and the economic condition index (IKE) fell in the first quarter of 2022 although they were still above or around 100, indicating continued public optimism, he added.



IKK was recorded at 119.6, 113.1, and 111.0, and IKE at 100.9, 95.5, and 93.9 during the January–March period.


Translator: Sanya Dinda S, Suharto
Editor: Fardah Assegaf
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