"The state budget is working extraordinarily to stabilize prices, including providing subsidies that have soared to more than three times," the minister noted at the KiTA State Budget Press Conference here on Tuesday.
Indrawati remarked that one of the efforts to control the inflation rate was through the provision of subsidies for commodities, such as oil, whose prices were soaring at the global level.
The minister acknowledged that Indonesia would not be spared from the effects of rising global commodity prices, so inflation would creep up, including when the government raised the fuel prices.
"Our inflation rose when we also raised oil prices, which had soared extraordinarily high," she pointed out.
Indrawati explained that efforts to control inflation by providing subsidies using the state budget are a policy mix step along with efforts by Bank Indonesia (BI) to suppress inflation.
The use of the state budget has prevented BI from having to respond in an extreme manner to rising inflation as was done by several central banks in developed countries that have raised interest rates massively, thereby impacting the economy.
The minister noted that Indonesia's inflation at 5.5 percent was also relatively good as compared to all nations, both G20 member countries and ASEAN 6 as well as ASEAN 5.
Several countries experienced inflation above Indonesia's rate, including Thailand, at 5.6 percent; Brazil, 5.9 percent; India, 5.9 percent; France, 6.2 percent; Singapore, 6.7 percent; Canada, 6.8 percent; the United States, 7.1 percent; Europe, 10.1 percent; England, 10.7 percent; while Argentina even reached 92.4 percent and Turkey, 84.4 percent.
"This is one of the very good achievements of how the government and BI have implemented a policy mix to maintain price levels, including subsidies using the state budget," she explained.
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Translator: Astrid Faidlatul Habibah, Katriana
Editor: Rahmad Nasution
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