Jakarta, Feb 3 (Antara) - The government needs to control the prices of volatile food items to keep inflation low based on its set target range of 2.5-4.5 percent in 2018.
After having successfully lowered the country's 2017 inflation rate to 3.61 percent, or below its target of 4.3 percent, the government is determined to keep this year's inflation rate within the 2.5-4.5 percent range.
According to Finance Minister Sri Mulyani Indrawati, the government was able to lower the inflation rate in 2017 to below its predicted figure owing to its efforts to control the fluctuations in the prices of volatile food items.
Hence, the government should continue to control food price volatility to keep the inflation rate low this year. This holds significance, as food items had contributed 2.34 percent to the January 2018 inflation. The Central Bureau of Statistics (BPS) had recorded that inflation in January 2018 was 0.62 percent, bringing the year-on-year inflation to 3.25 percent.
"Rice was the biggest contributor to January's inflation, adding 0.24 percent to the inflation," BPS Chief Suhariyanto noted at a press conference in Jakarta on Thursday (Feb 1).
The other food items that contributed to the inflation were purebred chicken meat, at 0.07 percent; fresh fish, 0.05 percent; bird eye's chili, 0.04 percent; and red chili, 0.03 percent, he noted.
Overall, food items contributed 2.34 percent to the January 2018 inflation.
Meanwhile, clothing contributed 0.50 percent, while processed foods, beverages, cigarettes, and tobacco contributed 0.43 percent to the inflation. The BPS also recorded inflation from volatile prices at 2.58 percent; core inflation, 0.31 percent; and deflation from administered prices, 0.15 percent.
The other inflation contributors were healthcare, with 0.28 percent; housing, water, electricity, gas, and fuel, with 0.23 percent; and education, recreation, and sports, with 0.16 percent.
It is expected that the government would this year be able to curb the inflation rate and maintain the lower level, as it had achieved in 2017. It seeks to keep the inflation rate within the 2.5-4.5 percent range and maintain the public's purchasing power by continuing to implement some strategic regulations, including the application of the Highest Retail Price (HRP) regulations for some important commodities in the country.
"We will continue to make attempts to control inflation in the coming years, so that the economic growth will not go in vain," he stated at a press conference in Jakarta on Thursday (Jan 4).
During 2017, several policies of the Ministry of Trade that were able to withstand the inflation rate included the establishment of the HRP regulations for rice, sugar, cooking oil, and frozen beef. With regard to the HRP of rice, the price is set based on the area and type of the commodity.
The Ministry of Trade also necessitates business players to report the availability of stocks in their warehouses transparently.
Based on data of the Central Bureau of Statistics, inflation in 2017 rose as compared to the previous years. The inflation rate in 2016 stood at 3.02 percent, while in 2015, it was recorded at 3.35 percent. In 2017, food items experienced an inflation of 1.26 percent, with a contribution of 0.25 percent.
Higher inflation in 2017 as compared to 2015 and 2016 was caused by the government's move to raise the electricity tariff of household customers by 900 volt-amperes of electricity as well as the increased cost of renewal of the Vehicle Registration Certificate (STNK).
The increase in electricity tariffs contributed 0.81 percent to the inflation rate, while the STNK renewal cost contributed 0.24 percent; fresh fish commodity, 0.2 percent; rice, 0.16 percent; and chicken eggs, 0.1 percent.
Lukita remarked that although the annual rate of inflation rose, it was still within the acceptable limit set by the government. With the maintained level of inflation, the purchasing power of the community will remain intact.
"By 2018, we will make additional efforts to control inflation. We will not let the prices rise excessively," he revealed.
Last month, the government and Bank Indonesia (BI) had agreed on five strategies to keep inflation in 2018 within the target range of 2.5-4.5 percent.
"The coordination meeting of Inflation Control Teams has specifically agreed on five strategies. Firstly, the government keeps inflation rate of volatile food items at a maximum of four to five percent by ensuring food supply," Agusman, BI executive director of communications, had noted in Jakarta on Monday (Jan 22).
The efforts to maintain food price volatility include managing the readiness of production over time, strengthening the government's food reserves and governance of market operations by the National Logistics Agency, improving production management through strengthening of corporate and cooperative farming, managing production and post-production processes, and improving the quality of rice through milling revitalization.
Secondly, the government has regulated policies, especially those related to administered prices, such as fuel prices.
"Thirdly, it involves strengthening coordination among the central and local governments as well as the BI, among others, through the implementation of the national coordinating meeting of Inflation Control Teams in 2018," Agusman remarked.
The next measure is to strengthen the quality of data in an attempt to support policy making and strengthen the policy mix of the BI.
Low and stable inflation contributes positively to strengthening the momentum to realize economic recovery and improve the people's welfare.
The Indonesian government has also set the target of inflation rate for 2019 at 3.5 percent and at three percent for 2020.
"(The target of) inflation rate for 2020 is three percent, plus or minus 1 percent. In general, the Indonesian inflation rate has declined each year," Coordinating Minister for Economic Affairs Darmin Nasution remarked after attending a coordination meeting of regional inflation control teams in Jakarta on Monday (Jan 22).***3***(a014/INE)
EDITED BY INE(T.A014/A/BESSR/F. Assegaf) 03-02-2018 15:55: |
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