TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Lagging food investment may risk inflation in 2024, experts warn
Economists have cautioned the government to address the growing FDI imbalance between food producing sectors and the manufacturing and mining sectors, particularly as harvest disruptions due to El Niño were expected to continue into 2024.
Change Size
Smallholder farmers plant rice seedlings on Oct. 12, 2023 at a paddy field in West Karawang district, West Java, one of the country’s rice production hubs. (Antara/Kuntum Riswan)
D
eclining investment in the food industry could worsen inflation in Indonesia, experts warn, as extreme weather due to El Niño is expected to persist into the coming year.
The country’s food security was already weak and could be worsened by the existing restrictions on food imports amid the expected impacts of the El Niño weather phenomenon, Aviliani, a senior economist at the Institute for Development of Economics and Finance (Indef), said during a press briefing on Thursday.
The government “needs to be careful in 2024, because as experts have warned about [the impacts of] El Niño, this is something that needs treading carefully so it doesn’t trigger higher inflation”, he said.
Food, beverage and tobacco were the top contributors to inflation in November, together comprising 1.72 percentage points of 2.86 percent overall inflation, or 60 percent of the monthly inflation rate.
Read also: Inflation moves closer to 3 percent amid costly food prices
Indef associate researcher Asmiati Malik said [in the statement/at the same event] that investment in the primary sectors of forestry, fishery and agriculture had been experiencing a declining trend over the past five years.
This stood in stark contrast to the considerable investments in the mining and manufacturing industries, she said.
