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Experts urge more support for poorest Indonesians amid growing inflation
Economists say rising consumer prices disproportionately affect low-income families and are urging the government to protect them as inflation continues to bite.
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On the edge: Stilt houses stand in a makeshift riverbank settlement in Jakarta in this file photograph from October 2020. Economists are urging the government to provide additional support for low-income households, which will be hardest hit by soaring commodities prices, to maintain the pace of recovery. (JP/Dhoni Setiawan)
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nflation will hit low-income households harder than others, economists have warned as they urge the government to devise an appropriate policy response as prices keep surging.
Statistics Indonesia (BPS) data show that the consumer price index (CPI) in April was up 3.47 percent year-on-year (yoy), the highest since August 2019, as price controls were lifted on commodities like packaged cooking oil and nonsubsidized Pertamax gasoline on the back of rising demand and mobility during Ramadan.
Some officials described the inflation rise as indicative of restored purchasing power among consumers following the hardships of the pandemic. Experts told The Jakarta Post, however, that the effect was a burden on household economies, particularly for families living on low incomes.
Having to spend more on vital everyday goods and commodities, many low earners had little left to cover other expenses, including the necessary costs to improve their lives.
“The most impacted by this rapidly increasing inflation would be the lower-income group,” Institute for Development of Economics and Finance (Indef) researcher Abdul Manap Pulungan told reporters during an in-person briefing on May 11.
Read also: Inflation jumps to nearly 3-year high, GDP growth steadies
Indonesia saw a decline in poverty and unemployment as economic growth picked up again amid steady recovery. Unemployment fell to 5.83 percent this February, down significantly from the decade high of 7.07 percent in August 2020.
