Jokowi Comments on Indonesia's Deflation Trend
Deflation trend has been going on since May 2024.
REPUBLIKA.CO.ID, JAKARTA - President Joko Widodo (Jokowi) stressed that deflation and inflation should be controlled equally so as not to harm all parties.
“Whatever is called deflation and inflation, both must be controlled so that prices are stable, not to harm producers, farmers, fishermen, SMEs, manufacturers, but also from the consumer side so that prices do not rise,” President Jokowi said after opening the Nusantara TNI Fun Run in IKN, East Kalimantan, Sunday (6/10/2023) as recorded votes received in Jakarta.
The president responded to the deflation that occurred for five consecutive months as reported by the Bada Statistical Center (BPS). The Head of State also asked that the occurrence of such deflation should be checked even further, whether due to falling prices of goods or indeed reduced purchasing power of people.
“Check carefully, deflation is due to falling prices of goods, because the supply is good, because the distribution is good, because there are no barriers to transportation or because there is reduced purchasing power. Control is necessary, balance is necessary,” the president said.
Furthermore, the President also alluded to record annual inflation (yoy) in September 2024 of 1.84 percent which he considered to be good.
“We are at the moment that last YoY inflation was about 1.8, well, but let's not make it too low also so that producers are not harmed, so that farmers who produce are not harmed. It is maintaining that balance that is not easy and we will try to continue,” the president said.
Earlier, Finance Minister Sri Mulyani Indrawati believed the five-month deflation was not a negative signal for the economy.
That's because deflation is caused by the volatile price component relating to food commodities. With food deflation, then the prices of foodstuffs on the market are in stable or even declining conditions.
“The deflation of the last five months has mainly contributed to the decline in food prices. In my opinion, this is a positive development, especially for people's purchasing power,” Sri Mulyani said at the Ministry of Finance office in Jakarta, Friday (4/10).
He said public spending, mainly the lower middle group, was dominated by food shopping. That is, food prices in a declining market can actually help people reach for groceries more cheaply.
BPS noted that Indonesia's economy experienced deflation of 0.12 percent (month-to-month/mtm) in September 2024. This deflationary trend has been ongoing since May 2024, with deflation details of 0.03 percent in May, 0.08 percent in June, 0.18 percent in July, and 0.03 percent in August.
Annual inflation was recorded at 1.84 per cent (yoy) and calendar year inflation was 0.74 per cent (year to date/ytd).
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