The increase in core inflation shows that the people's purchasing power is getting strongerJakarta (ANTARA) - The Ministry of Finance encourages the acceleration and effectiveness of the use of the food security budget to mitigate the inflation risk from food commodities to suppress volatile food inflation.
Head of the Fiscal Policy Agency (BKF) of the Ministry of Finance Febrio Kacaribu said volatile food inflation in August 2022 had decreased to a level of 8.93 percent (yoy), from 11.47 percent in the previous month.
"To mitigate the risk of inflation from food commodities, the government will encourage acceleration and effectiveness of the utilization of the food security budget," he noted in Jakarta, Friday.
Kacaribu explained that the decline in volatile food inflation in August was due to the normal supply of horticultural products in line with improving harvests in food-producing areas.
"The price of cooking oil also recorded a decline in line with the slowing down of crude palm oil (CPO) prices," he added.
On the other hand, price inflation regulated by the government or administered prices in August 2022 slightly increased to 6.84 percent (yoy), from the July realization of 6.51 percent.
Air transportation fares also decreased in line with the decline in avtur prices and the exemption of Non-Tax State Revenue (PNBP) tariffs for landing and storing aircraft at airports.
Kacaribu said the budget for energy subsidies and compensation that had continued to increase since 2020 had maintained the people's purchasing power and the momentum of economic recovery.
Meanwhile, core inflation also increased in August 2022 at 3.04 percent (yoy), from July's 2.86 percent.
Core inflation occurred in almost all sectors of goods and services, such as clothing, housing services, education, recreation, and the provision of food and beverages and restaurants.
"The increase in core inflation shows that the people's purchasing power is getting stronger," he remarked.
In general, inflation in August 2022 was recorded at 4.69 percent (yoy), which managed to decrease as compared to July's position of 4.94 percent (yoy).
On a monthly basis, August 2022 recorded a deflation of 0.21 percent that was the largest to have occurred since September 2019.
Kacaribu emphasized the need for coordination and synergy between the central government and local governments to overcome the inflation risk going forward.
The government will conduct trade cooperation to maintain the balance of supply and demand between regions and accelerate distribution of the state budget.
"From the supply side, the government will continue to ensure smooth supply and distribution, especially for energy and food," he stated.
Transfers to Regions and Village Funds (TKDD) can also contribute to inflation control in the regions, specifically for food security and the construction of roads and bridges as an effort to facilitate the supply and distribution of goods, Kacaribu explained.
"From the government's demand side, we will also collaborate with relevant authorities," he said.
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Translator: Astrid Faidlatul H, Resinta S
Editor: Sri Haryati
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