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Jakarta Post

Market prices stabilized, Banyuwangi economy’s in recovery: local BI head

  • Inforial

    The Jakarta Post

Jakarta, Indonesia   /   Tue, December 1, 2020   /   08:47 pm
Market prices stabilized, Banyuwangi economy’s in recovery: local BI head . (Courtesy of Pemkab Banyuwangi/.)

Banyuwangi regency in East Java stabilized market prices in October, according to the Jember, East Java, office of Bank Indonesia (BI).

In October, Banyuwangi's inflation stood at 0.07 percent. This is a potential sign of economic recovery, indicating that the regency’s economy has bounced back from a deflation of 0.17 percent in September, according to data from Statistics Indonesia (BPS).

According to the head of the Jember BI office, Hestu Wibowo, economic figures should always be analysed contextually and in this case inflation is not always a negative thing. To read the inflation rate contextually, he said, you needed to contrast it against the deflation that happened in the regency in September. 

Amid the pandemic, several regions in East Java have suffered deflation, meaning that people’s weakened purchasing power reduced the price of goods in the marketplace.

Banyuwangi in particular endured deflation in August and September. Fortunately, the regency recovered from the deflation in October.

The fact that Banyuwangi’s economy had eventually pulled itself out of deflation, he said, indicated that the regional economy had already recovered a little bit.

With the regency’s recovering economy, market prices have been stabilized and people’s purchasing power has also increased.

“Inflation should not always trigger fear and anxiety among individuals. It can also be a marker of economic activity and growth, especially during a pandemic such as one we are facing right now,” Hestu said.

.. (Courtesy of Pemkab Banyuwangi/.)

According to Hestu, Banyuwangi’s economic recovery has been thanks to the local tourist sector, which slowly resumed its activities after they had ground to a halt in the initial months of the COVID-19 pandemic.

Hestu’s explanation aligned with a BPS report revealing that local tourism players had started to resume their activities again.

“As part of the tourist sector’s multiplier effect, the resumption of its activities has also stimulated the accommodation, food and beverage sectors,” Hestu explained.

Hestu said he hoped that the relevant stakeholders could continue to sustain the conditions to help the region’s economy pick up where it had left off before the pandemic, by keeping regional inflation rates at moderate levels.

“It is very important to make sure that we keep the inflation in check. In order to achieve that, we need to take some control measures. If inflation rates get too high or too low in some regions, it usually indicates economic trouble,” he added. 

“Therefore, a collective effort to keep the inflation rate in check is something we need to do together. We will continue striving to improve the economy, yet we also need to keep commodity prices in check to put a rein on regional inflation,” he continued.

Meanwhile, Banyuwangi Regent Azwar Anas expressed his appreciation and gratitude for the Jember BI office’s continuous efforts to accompany and supervise regional inflation control programs.

“Recently, Banyuwangi won an award from the regional inflation control team for its success in maintaining regional inflation,” he said. The award, recognizing such regencies across Java and Bali, was presented by Coordinating Economic Minister Airlangga Hartarto in October. Anas also credited BI for the regency’s success.

Anas said he hoped BI would continue lending its support to the collective effort to control regional inflation.

Anas also credited the local tourist sector for Banyuwangi’s economic recovery, citing its successful adaptation to new habits as the most important ingredients in its activity resumption amid the pandemic.

“During the pandemic, your ability to guarantee visitors’ health and safety have been key to survival. Banyuwangi has already implemented a new standard by certifying hospitality outlets that have adhered closely to these protocols, in our efforts to create a clean, healthy and safe place for visitors to Banyuwangi,” he said.