Indonesia’s Finance Minister, Sri Mulyani Indrawati has said that the government and Bank Indonesia (BI) have worked together successfully to reduce inflation in the country, according to reporting from Antara News.
“Indonesia is one of the countries that have succeeded in reducing inflation without having to dim their economy because of raising the interest rates too high,” she said in a statement received by Antara News on Friday.
She made the remarks while delivering a public lecture at the University of Indonesia (UI) in Depok, West Java, on Wednesday (May 31, 2023). She said that the government and BI have implemented good fiscal and monetary policies.
According to her, the government and BI have agreed to consistently maintain inflation in the range of 2-percent to 4-percent throughout 2023.
Curbing inflation is meant to accelerate national economic recovery amid future risks of inflation, she said.
Antara News report that several strategic steps have been taken to control inflation, such as strengthening policy coordination at the central and regional levels, to maintain macroeconomic stability and encourage the national economic recovery momentum, Indrawati explained.
Meanwhile, the government and the central bank need to maintain the administered price and volatile food price inflation, especially during national religious days, so that they can stay in the range of 3 to 5-percent at the end of the year.
That way, Indonesia will not always have to use monetary policies for dealing with inflation, and BI will not need to raise interest rates as high as other countries’ central banks.
“Indonesia’s inflation remains low because we handle it from the government side, and the volatile food and administered prices,” she said.
Controlling inflation is a short-term policy aimed at building a strong foundation for realizing the development agenda and social welfare, the minister added.
The central and regional governments, together with BI, need to continue to collaborate for maintaining price stability and ensuring the smooth distribution and supply of essential commodities, she said.
Source: Antara News