Jakarta, April 3 (Antara) - Rise in demand for basic commodities usually triggers inflation during the fasting month, which this year is expected to start by the fourth week of May.
The government, through the Ministry of Trade, will impose a fixed ceiling price (HET) due to an increase in price, particularly of food commodities that are prone to volatile prices.
The Ministry of Trade had earlier revealed its plan to impose HET for food commodities, such as sugar, frozen meat, and non-packaged cooking oil, with effect from April 10, 2017.
The three food commodities have a relatively high contribution to the inflation rate. Hence, the Ministry of Trade has accorded them priority in its plan to impose HET.
According to the central bank, Bank Indonesia (BI), the government should take control of the inflation derived from the volatile food commodities, so that it would achieve its annual inflation target at 3 to 5 percent for 2017.
"The problem of inflation always arises from the food sector. Food inflation always records a rate of 5 to 10 percent. This year, we have curbed food inflation at the 3 to 5 percent rate," Dody Budi Waluyo, BI's head for Monetary and Economic Policy Department, noted in Jakarta on Friday (March 31).
On average, the volatile food inflation rate so far is always higher than the consumer price index (IHK). At the end of 2016, the volatile food inflation was recorded at 5.92 percent year-on-year, over the IHK rate of 3.02 percent.
Volatile food inflation even touched a two-digit rate in 2013 and 2014. In 2013, it stood at 11.83 percent, and in 2014, it was recorded at 10.88 percent. But in 2015, it dropped drastically to 4.84 percent.
Overall, the central bank has already been able to curb the core inflation well. Besides that, the government's administered price policy was also viewed as not being a burden to consumers. Yet, inflation is still higher, because volatile food commodities still contribute to relatively high inflation rate.
"Inflation is always triggered by volatile food commodities," Waluyo remarked.
Thus, what needs to be taken into account is its impact on other sector, such as the transportation sector, which could also drive up the rate of core inflation. "We are concerned over the inflation impact. This poses hindrances to our efforts to assist the agricultural sector," Waluyo added.
The BI¿s role has also been expanded. In the agriculture sector, for instance, the central bank has been trying to provide assistance for the development of its downstream sector. Earlier, the government's attention was given to the upstream sector.
"In terms of downstream sector, we talk about value added. We build a cluster system in the context of controlling the inflation from food commodities such as shallots and red chilies," Waluyo remarked.
Therefore, according to the Central Bureau of Statistics (BPS), the plan to impose a fixed ceiling price (HET) for food commodities prone to volatility in rates will help curb the high inflation.
"I think it will help (curb inflation). At least, it will make the prices stable. I do not know whether it could lower the prices, but making the prices stable is already a good enough measure," BPS Deputy for Statistics, Distribution, and Services Sasmito Hadi Wibowo stated in Jakarta on Monday.
Trade Ministry is plan to impose HET for food commodities, such as sugar, frozen meat, and non-packaged cooking oil, effective April 10, 2017. The three food commodities have a relatively high contribution to the inflation rate.
The price of sugar per kilogram (kg) will be set at Rp12,500; frozen meat, at Rp80 thousand per kg; and non-packaged cooking oil, at Rp12 thousand per liter.
Modern retailers are obligated to abide by the IHTs decided by the Ministry of Trade.
With regard to inflation in May and June, the BPS has forecast that it will increase in line with the fasting month of Ramadhan and the subsequent post-fasting Lebaran festivities.
In the run-up to the fasting month and Lebaran, inflation usually increases, as demand also increases, notably for meat.
Last March, a deflation of 0.02 percent was recorded, which was unexpected, and was triggered by a decline in the prices of several food commodities.
Food items experienced a deflation of 0.66 percent, contributing -0.08 percent to the March 2017 deflation.
Food commodities that contributed to the deflation rate included red chili, at -0.08 percent; rice, at -0.03 percent; cayenne pepper, at -0.03 percent; fresh fish, at -0.02 percent; eggs, at -0.02 percent; and garlic, at -0.01 percent.
Commodities undergoing price hikes included "jengkol," or dogfruit, electricity tariff, shallots, grapes, cooking oil, fried chicken, rice with side dish, kretek cigarettes, and gasoline.
In the meatime, President Joko Widodo and Vice President Jusuf Kalla held a closed meeting to discuss the fulfillment of basic needs during next fasting month and Lebaran festivities
"In today's meeting, we discussed the preparations for Lebaran this year. It is good that we start the preparations about two months ahead of Ramadhan to be better prepared Lebaran celebration," Jokowi said during his opening remark at the meeting here on Monday (April 3).
(A014/INE)EDITED BY INE(T.A014/A/BESSR/A. Abdussalam) 03-04-2017 21:57: |
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