Finance Minister Sri Mulyani Indrawati highlighted that the development of domestically harvested commodities, such as chili, had helped to reduce the inflation rate in volatile food prices in August 2022.
“The rate used to increase to 11 percent, and now, it decreased to eight percent. The diagnosis stated that food commodities helped to lower the percentage,” she noted during a meeting with the Indonesian House of Representatives in Jakarta, Thursday.
Volatile prices in August 2022 experienced an inflation of 8.93 percent on an annual basis while on a monthly basis experienced a deflation of 2.9 percent, she remarked.
This realization decreased as compared to July 2022, specifically volatile prices on an annual basis that recorded an inflation of 11.47 percent and contributed to the overall inflation of 4.94 percent (yoy) of 0.25 percent, Indrawati added.
She noted that this decline showed an increase in inflation caused by volatile food that was highly dependent on global conditions.
On the other hand, the volatile food factor can be controlled relatively quickly, especially in terms of chili commodities, Indrawati remarked.
She explained that most of the commodities can be produced domestically at affordable prices, with sufficient quantities to stabilize prices.
Earlier, President Joko Widodo (Jokowi) had also urged regional heads, the minister of agriculture, and the minister of trade to evaluate all factors that contributed to inflation.
The government is urged to use the state budget instrument, including transfers to regions (TKD), and transfer funds from the central government to the regional governments in the form of unexpected funds that can be used flexibly to reduce the increase in commodity prices.
“The inflation control team is now focusing on the food price factor,” Indrawati pointed out.
Moreover, several commodities can be developed and produced independently in the country in an effort to stabilize future inflation, especially in terms of volatile prices.
However, the minister remains wary of inflation from volatile foods, as some commodities depending on imports, such as wheat and soybeans, will be affected by the global turmoil.
“Like cooking oil, even though we have crude palm oil (CPO) here, but the substitute is sunflower produced by Ukraine. Hence, we have to anticipate these various dynamics,” she remarked.
Source: Antara News