….we must control administered prices of food, especially through food cooperation between regions.
Jakarta (ANTARA) - Indonesia could potentially record higher inflation than economic growth in the third quarter of 2022, Coordinating Minister for Economic Affairs, Airlangga Hartarto, has informed.

He also brought the attention of local governments to this possibility.



“We have to prepare; our inflation will be slightly higher than the economic growth rate. Therefore, we must control administered prices of food, especially through food cooperation between regions," he said during the 2022 Central and Regional Coordination Meeting for Inflation Control, which was followed online on Wednesday.



For the last four months of 2022, Indonesia has an inflation target of below 5 percent for commodities, he informed. This is based on the inflation in the energy sector, which could range from 1.6 to 2.0 percent.


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According to Hartarto, an increase in fuel prices led to the government raising the amount of subsidies. For example, the demand for subsidized Pertalite, which was originally set at 23 million kiloliters, increased to 29 million kiloliters. Similarly, the demand for subsidized diesel rose from 15 million kiloliters to 17 million kiloliters. As a result, the subsidy, which was pegged at Rp502 trillion, increased to Rp698 trillion.



The minister also asked regional heads to strengthen cooperation to maintain price stability and improve food security, as directed by President Joko Widodo (Jokowi), including by reducing transportation costs by controlling inter-regional trade distribution facilities, lowering airfares by increasing the number of planes, and optimizing the use of the unexpected expenditure budget to support efforts to control regional inflation.



"President Jokowi has asked us to continue monitoring this issue as we monitored the COVID-19 cases. We must pay more attention to markets, since they have an influential role, where our economy grew by 5.4 percent. Maybe in the third quarter, the figure will be similar, around 5.2 percent," Hartarto said.


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He further emphasized that the challenges faced in controlling price stability and food security were real. He informed that the government has formed a special food agency to handle food inflation.



Hartarto said he hopes that the President’s mandate will be carried out well by the central government, including Bank Indonesia, the National Food Agency, and local governments.



"We will continue to monitor availability. So, the first is food availability. The government has also made policies related to fertilizers," he added.


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Translator: Kuntum Khaira R, Resinta S
Editor: Fardah Assegaf
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