(The policies were formulated) Because we do not want health issues, which then become social issues, which also become economic issues, and financial issues.
Jakarta (ANTARA) - Various policy mixes that have been implemented by the government over the past two years have helped prevent stagflation in Indonesia, according to Deputy Minister of Finance, Suahasil Nazara.



The policies covered domestic COVID-19 handling and the provision of a social protection budget for the economically vulnerable, he highlighted during a public lecture at the University of Indonesia (UI), which was followed online on Monday.



They include the provision of aid to micro, small, and medium enterprises (MSMEs), tax incentive provision to taxpayers, and credit restructurization relaxation to financial service institutions.



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“(The policies were formulated) Because we do not want health issues, which then become social issues, which also become economic issues, and financial issues," he explained.



The policies have helped the Indonesian economy to continue to grow and kept the country from experiencing stagflation amid a rise in inflation, he said.



"Stagflation occurs when the economy declines or has negative growth," Nazara explained.



Indonesia's economy contracted -2.07 percent year on year (yoy) in 2020. Meanwhile, it grew 3.69 percent yoy in 2021 and 5.44 percent yoy in the second quarter of 2022.


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Currently, the government is continuing to make efforts to ensure that Indonesia's economic growth can reach the 5.2-percent yoy target by the end of 2022, the deputy minister added.



According to Nazara, the biggest cause for the rise in inflation has been the Russian invasion of Ukraine, which has halted the supply chain for food and energy at the global level.



However, stakeholders are making efforts to stem the domestic inflation figure, so that it can reach the target of below 4 percent yoy by the end of 2022, he added.



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Translator: M Heriyanto, Fadhli Ruhman
Editor: Fardah Assegaf
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