Indonesia’s efforts to control inflation during a global economic crisis have been circulating across global and local newswires recently and now the government and Bank Indonesia (BI) have agreed on five strategic steps to consistently maintain Consumer Price Index (CPI) inflation within the target range of 3.0-percent (± 1-percent) in 2023, according to reporting from InfoPublik.
Erwin Haryono, Executive Director Head of the Bank Indonesia Communication Department, said at the High Level Meeting of the Central Inflation Control Team (HLM TPIP), which was held on 20 February 2023, outlined the five strategic steps as follows:
- Strengthen policy coordination to maintain macroeconomic stability and encourage national economic growth;
- Maintain inflation in the Volatile Foods (VF) component, especially during National Religious Holidays (HBKN) so that it is in the range of 3.0-percent to 5.0-percent.
- Strengthening domestic food security through: (i) accelerating the implementation of the food storage program; and (ii) expanding inter-regional cooperation;
- Strengthening the availability of food data to support the formulation of inflation control policies;
- Strengthen communication synergies to support the management of public inflation expectations.
TPIP will continue to strengthen policy synergies to continue implementing policies and work programs on the inflation control roadmap for 2022–2024, say InfoPublik in their report.
The policy synergy pursued by the Government and BI includes the implementation of various programme innovations to maintain supply stability and smooth distribution.
As a form of commitment to strengthening the effectiveness of inflation control efforts, TPIP will then hold a National Coordination Meeting (Rakornas) for Inflation Control in 2023 with the theme: “Strengthening Synergy and Innovation for Price Stabilization Towards Sustainable National Food Security”.
CPI inflation in 2022 is much lower than forecast. CPI inflation in December 2022 was recorded at 5.51-percent (YoY), below the consensus forecast of 6.5-percent (YoY) after the price adjustment for fuel oil (BBM) in September 2022.
This development was inseparable from the hard efforts taken by the Central and Regional Governments, BI, and various other strategic partners through the Central and Regional Inflation Control Teams (TPIP-TPID) and the National Food Inflation Control Movement (GNPIP), say InfoPublik.
Efforts taken in its development have been able to control the after-effects of fuel price adjustments and reduce inflationary pressures, including food prices, in line with the response to maintain price affordability, manage supply availability, improve distribution smoothness and strengthen communication strategy.
Going forward, the Government and BI at the central and regional levels are committed to continuing to strengthen synergies so that CPI inflation can be controlled within its target.
The synergy through TPIP and TPID continues by strengthening the GNPIP program in various regions.
InfoPublik also report that this programme is directed at strengthening national food security on an ongoing basis through increasing the productivity and efficiency of the domestic food supply chain, as well as improving the quality of food data as an important element for policy formulation.
Various efforts to keep inflation under control within this target are in turn expected to support efforts to promote sustainable economic growth towards a developed Indonesia.
The HLM TPIP was chaired by the Coordinating Minister for the Economy, and attended by the Governor of Bank Indonesia, Minister of Finance, Minister of Energy and Mineral Resources, Minister of Maritime Affairs and Fisheries, Deputy Minister I of State-Owned Enterprises, Head of the National Food Agency, Head of the Central Bureau of Statistics, Main Director of BULOG, and echelon I officials and/or equivalent level representatives of Ministries/Institutions that are members of TPIP.