April Inflation Shows Increased Purchasing Power

Indonesian Traditional Market

The inflation that occurred in April 2022 turned out to be a positive sign for Indonesia. This inflation shows that the purchasing power of the Indonesian people continues to increase. Even the level has reached the level before the pandemic hit Indonesia.

Coordinating Minister for the Economy Airlangga Hartarto in a written statement quoted Tuesday (10/5/2022) said that this inflation is a good sign for Indonesia’s economic recovery.

Airlangga said, “The strengthening of people’s purchasing power has contributed to an increase in inflation in April which coincides with Ramadan and Eid al-Fitr in 2022. This condition is a sign that people’s purchasing power during Ramadan and Eid has returned to pre-pandemic levels.”

Inflation in April 2022, based on a report from the Central Statistics Agency (BPS), was recorded at 0.95% (mtm) or 3.47% (YoY).

This realization is still maintained within the target range of the 2022 State Budget, which is 3±1% (YoY) amid rising global food and energy commodity prices and rising inflation in various countries.

The volatile food component (VF) was the main contributor to April inflation with a share of 0.39% and inflation of 2.30% (mtm) was driven by the increase in prices al. cooking oil, purebred chicken, and purebred chicken eggs.

Furthermore, the government-regulated price inflation component (administered prices/AP) experienced inflation of 1.83% (mtm) and 4.83% (YoY) due to an increase in Pertamax gasoline and air freight rates. Meanwhile, core inflation was recorded at 0.36% (mtm) or 2.60% (YoY).

For now, the government does not seem to be concerned about the inflation situation in the country. Although now the inflation level has reached 3.47% (year-on-year/YoY) or the highest since 2019.

“Still in the APBN 3 range plus-minus 1%,” said Coordinating Minister for the Economy Airlangga Hartarto in a press conference, Monday (9/5/2022)

If it is viewed in more detail, core inflation reached 2.60%. Then the government regulated prices at 4.83% and volatile prices at 5.48%.

Based on specific components, inflation for energy reached 4.13%, food ingredients 5.44%, and others 2.89%.

Compared to the previous month (month-to-month/mtm), inflation in April 2021 reached 0.95%. This is the highest on record since 2017.