UNAIR NEWS – Bank Indonesia (BI) in early February set national inflation at 0.23 percent. It is influenced by several factors that exist in the community.
As a response, a lecturer of Development Economics, Faculty of Economics and Business (FEB) Universitas Airlangga (UNAIR), Rossanto Dwi Handoyo, SE., M. Si., Ph. D., gave his opinion. According to him, the 0.23 percent inflation rate issued by BPS was triggered by the peak cycle.
“The current national inflation cycle is still classified on the peak and is still safe for the community,” he said on Wednesday, February 19, 2020.
Rossanto revealed that the inflation rate in January was at its peak due to the increase in aggregate demand both at the beginning of new year and Chinese new year. Strategic food price such as chili and garlic have risen by 10 to 30 per cent.
The availability of food commodities in the community is also disrupted. It can be seen in some agricultural commodities that are still in the planting period. This factor is one of the reasons why the price of chili is rising and influencing the inflation rate.
Dependence on imports also affects the price in society. Garlic produced domestically cannot not fulfill the domestic needs, even 90 percent of it is imported from China and its imports are inhibited by with issue of Coronvirus.
“The Coronavirus outbreak in January caused the import of garlic to falter a little and supply restrictions also affected prices on the market,” he said.
However, Rossanto revealed that the actions taken by the government to anticipate rising price were quite good. The Regional Inflation Control Team (TPID) in some cases often intervenes with market operations. On the other hand, the government took action to reduce the cause of inflation by controlling the administered prices or prices of goods determined by the government such as gasoline pertamax, pertalite, and toll tariff adjustments that were able to anticipate rising prices of basic commodities.
Furthermore, BI which acts as the central bank, also continues to impose a fixed interest rate at 5 per cent. The action could also be an anticipation step for BI as the holder of monetary policy to keep rupiah from falling and maintain people’s purchasing power.
Rossanto also added that the inflation rate during Jokowi’s leadership was still relatively low compared to the previous leadership era. The inflation limit of 3 to 4 percent in the Jokowi era also became a reference for the work of the cabinet in developing the national economy. (*)
Author: Aditya Novrian
Editor: Khefti Al Mawalia
