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Govt rallies regions for ‘war’ on inflation
After months of pursuing various ways to tame inflation, the central government is calling on the regions to do their bit to alleviate rising pressure on consumer prices – and promises prizes for the top performers.
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A vegetable seller (left) serves a customer at Gintung Market in Bandar Lampung, Lampung, on June 16. (Antara/Ardiansyah)
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fter months of pursuing various ways to tame inflation, the central government is calling on the regions to do their bit to alleviate rising pressure on consumer prices.
In a meeting with regional leaders from the provincial to the regency level, President Joko “Jokowi” Widodo appealed for their cooperation in combating the impact of the recent fuel price hike and using their budget funds to assist the central government.
Although inflation cooled slightly in August, experts have warned that the recent decision by the government to increase the prices of subsidized fuels and some unsubsidized fuels would add to inflationary pressure in the coming months.
The state budget allocation earmarked for energy subsidies and compensation was increased several times this year as expected demand of the subsidized gasoline brand Pertalite and diesel brand Solar outstripped budgeted supply.
“Because of the fuel price hike, I see the impact on inflation […], and this is something we do not want. So, I ask [...] for the regions to cooperate, cooperate like when we worked simultaneously to overcome COVID-19,” the President said on Monday.
The President stated that the Finance Ministry and Home Ministry had issued regulations allowing for 2 percent of the general transfer funds (DTU) – which comprise revenue-sharing funds (DBH) and general allocation funds (DAU) – to be used to soften the blow of the fuel price hikes.
He left the policy tools up to the respective leaders but did recommend subsidies for some groups impacted by the fuel price hike, such as a Solar fuel subsidy for fisherfolk and raw materials subsidies for micro, small and medium enterprises.
