REPUBLIKA.CO.ID, JAKARTA -- The government should control domestic food prices to keep inflation in 2017 below the projected four percent, Coordinating Minister for Economic Affairs Darmin Nasution has said. "As long as we can address the issue of food prices, we can control the inflation rate in 2017," Darmin said during a dialogue here on Monday on Indonesia's economic prospects in 2017.

Darmin said the government should have started efforts to control inflation in 2017 because it would face another challenge regarding administered prices of electricity and fuel oil. The price of fuel oil is expected to increase as a result of the decision by the Organization of the Petroleum Exporting Countries (OPEC) to cut crude oil production.

Therefore, Darmin said the government will need to maintain food price stability to avoid volatility that will contribute to inflation, as was the case in 2016. "We want to ensure next year, even with electricity fare hike, as well as fuel oil price hike, inflation rate will not exceed four percent. It means that food (price) must be maintained," he added.

According to data of the Central Bureau of Statistics (BPS), inflation during January-November 2016 was 2.59 percent, and year-on-year inflation was 3.58 percent.

The formulation of policy to control food prices and the government's administered prices in 2017 would be based on valid and accurate data, he said. "Compared to last year, we now agree that the situation is better, and it is easier to make decisions on the policy that we need," Darmin said.

The government in its state budget 2017 had set a target of four percent for inflation, similar to the World Bank's projection, due to the increase in administered prices in some sectors.

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