Jakarta (ANTARA) - The central government is planning to continue to strengthen coordination with regional administrations to maintain inflation at the targeted level this year, a government official said.

The government is striving to control inflation by anticipating risks that can trigger price hikes in order to achieve the 3.0±1.0 percent inflation target by the end of 2023, Head of the Ministry of Finance's Fiscal Policy Agency (BKF) Febrio Kacaribu said.

"Comprehensive inflation control efforts will continue to be strengthened through central and regional coordination, including for optimizing the state budget and regional budget for maintaining price stability," he said in a statement released on Tuesday.

Indonesia recorded a downward trend in inflation as of the end of the first half of 2023, with inflation in June registered at 3.5 percent year-on-year (yoy), a decline from 4.0 percent yoy in May.

All components of inflation also tracked a downward trend. Core inflation was recorded at 2.6 percent yoy, and was relatively stable compared to May, when it was pegged at 2.7 percent yoy.

Meanwhile, administered price inflation continued to decline, though it remained at a relatively high level of 9.2 percent yoy.

From the food standpoint, volatile food price inflation was also under control due to the government's consistent implementation of several food price control policies.

For instance, it worked to increase food stocks routinely and held Cheap Food Events across Indonesia.

The two efforts had a significant impact on the decline in volatile food price inflation, pushing it to 1.2 percent yoy in June.

The achievement was lower compared to the peak of food inflation pressure seen in July 2022, when the figure reached 11.5 percent yoy.

Despite this, several commodities such as chicken meat and eggs saw a price spike due to rising demand along with the Eid al-Adha celebration and a rise in chicken feed and seed prices.

In the future, the government is planning to continue to monitor the potential risk of El Niño on food inflation.

The effort will include educating farmers about planting strategies and encouraging the optimization of water management infrastructure usage to minimize the risk of harvest failure.

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Translator: Imamatul Silfia, Fadhli Ruhman
Editor: Rahmad Nasution
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