Jokowi Emphasizes Importance of Controlling Deflation and Inflation for Price Stability

Jakarta, The Gulf Observer: President Joko Widodo (Jokowi) has underscored the necessity of controlling both deflation and inflation to ensure price stability and prevent disadvantages to all parties involved. His remarks came after inaugurating the Nusantara TNI Fun Run in the new capital, Nusantara, located in East Kalimantan, on Sunday.

The president’s comments followed a report from Statistics Indonesia (BPS) indicating that the country has experienced five consecutive months of deflation. He highlighted the importance of investigating the causes of deflation, questioning whether it results from a decrease in goods prices or a decline in consumer purchasing power.

“What is needed is control; what is needed is a balance,” President Jokowi stated.

During the event, the president also addressed the recent year-on-year inflation rate of 1.84 percent reported for September 2024, describing it as favorable. “We know that our latest year-on-year inflation is approximately 1.8 percent, which is good. However, it should not be too low so that producers do not experience losses and that farmers who produce do not experience losses,” he remarked.

Finance Minister Sri Mulyani Indrawati previously noted that the ongoing deflation, which has persisted for five months, should not be viewed negatively for Indonesia’s economy. “Deflation in the last five months was mainly caused by the decline in food prices. I think this is positive growth, especially for the community’s purchasing power,” she stated in Jakarta on Friday, October 4.

According to BPS, Indonesia experienced a month-to-month deflation of 0.12 percent in September 2024. This deflation has been consistent since May 2024, with monthly figures of 0.03 percent in May, 0.08 percent in June, 0.18 percent in July, and 0.03 percent in August. Meanwhile, annual inflation is recorded at 1.84 percent (year-on-year), with calendar year inflation at 0.74 percent (year-to-date).