It is also due to the acceleration of distribution of social aid to strengthen the people's purchasing powerJakarta (ANTARA) - The government's efforts increased household consumption that also boosted strong economic growth in the first quarter of 2022 to 5.01 percent annually (year on year/yoy), Presidential Staff Office's (KSP's) Main Expert Staff, Edy Priyono, stated.
However, on the other hand, there was an increase in the prices of basic commodities that was influenced by global economic uncertainty, Priyono noted on Tuesday.
"Despite the increase in prices of basic necessities, from the demand side, household consumption actually grew, which was 4.34 percent year on year, or higher than the growth in the fourth quarter of 2021, which was 3.55 percent (yoy)," he affirmed.
Priyono's statement was related to the issue of the prices of basic necessities in the domestic market, which according to the Political Indicator Survey on May 15, had lowered the level of public satisfaction with the performance of the government of President Joko Widodo and Vice President Ma'ruf Amin.
Priyono claimed that the strong growth in household consumption was supported by the government's policies to ease the people's mobility in line with the control in the pandemic and the acceleration of COVID-19 vaccination.
"It is also due to the acceleration of distribution of social aid to strengthen the people's purchasing power," he stated.
However, strengthening household consumption could also contribute to rising inflation. In April 2022, inflation was recorded at 0.95 percent on a monthly basis (month to month) or 3.47 percent on an annual basis (year to year).
"The high inflation also coincides with the Ramadan 2022 period, which cyclically increases demand," Priyono explained.
The KSP remains optimistic that the Indonesian economy in future will remain strong along with the government's commitment to expediting COVID-19 vaccination, expanding the opening of economic sectors, and providing various stimuli in the form of social assistance to the community.
Regarding the increase in the prices of basic commodities, Priyono said it cannot be separated from the global situation, such as the ongoing COVID-19 pandemic, the Russia-Ukraine conflict, the normalization of policies in developed countries, and changes in weather conditions.
On account of the global uncertainty, the prices of various commodities in the global market, including of food and energy, had increased, which eventually triggered price hikes in several countries.
“If this condition continues, it could lead to an increase in inflation, a decrease in the people's purchasing power and economic growth, as well as exert fiscal pressure, considering that the State Budget is mostly used to provide social support for the community, especially the poor," Priyono stated.
In addition, the monetary policies of developed countries have put pressure on financial markets. This could result in fluctuations in the rupiah exchange rate as well as the potential for higher interest rates in the financial market.
He ensured that the government would continue to optimize the state budget to provide social assistance to reduce the impact of global uncertainty on society, especially the poor.
The Political Indicators survey institute on May 15 released a survey which stated that public satisfaction with the performance of President Widodo - Vice President Amin decreased by six percent to 58.1 percent. The decline occurred one month after the last survey which stated that public satisfaction was recorded at 64.1 percent. The drastic decrease was attributed to the increase in the price of basic commodities.
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Translator: Indra Arief P, Resinta S
Editor: Sri Haryati
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