The Government and Bank Indonesia agree Strategic Measures to Control Inflation On Target - Bank Sentral Republik Indonesia
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August 05, 2020

No.21/50/DKom​​ 

The Government and Bank Indonesia have agreed a number of strategic measures to control Consumer Price Index (CPI) inflation within the target corridor of 3.5%±1% in 2019. CPI inflation in June 2019 was controlled at 3.28% (yoy), supported by mitigated inflationary pressures during the recent festive period below the average rate for the past five years. This accomplishment was possible due to monetary and fiscal policy synergy in terms of managing sound macroeconomic conditions coupled with structural policy, including infrastructure development in various regions that improved connectivity and ensured the smooth distribution of goods and services. Moving forward, Bank Indonesia, with the Central Government and Regional Administrations, will constantly strengthen policy coordination through various strategic measures to continue lowering inflation to the 3.0%±1% range targeted for 2020 and 2021, which will bolster solid, sustainable, balanced and inclusive economic growth.

That was the salient conclusion of the recent coordination meeting between leaders of institutions and ministries under the umbrella of the National Inflation Task Force (TPI), held on 10th July 2019 in Jakarta. The meeting was chaired by the Coordinating Minister for Economic Affairs as incumbent chairman of the National Inflation Task Force (TPI) and attended by the Governor of Bank Indonesia, Minister of National Development Planning (Bappenas), Deputy Minister of Finance, Chairman of BPS-Statistics Indonesia, President Director of the Indonesian Bureau of Logistics (Bulog) as well as echelon I and II officials from the Ministry of Home affairs, Ministry of Trade, Ministry of Agriculture, Ministry of Energy and Mineral Resources (ESDM), Ministry of State-Owned Enterprises, Ministry of Public Works and Housing, Ministry of Transport and the Cabinet Secretary.

The strategic measures to control inflation in 2019 within the target corridor agreed at the meeting are focused on efforts to control volatile food inflation at a maximum of 5%. The overarching policy is the so-called 4K policy (price affordability, supply availability, smooth distribution and effective communication), with a particular focus on supply availability and smooth distribution. The policy also takes into consideration the potential challenges that could influence the volatile food inflation outlook, including weather disruptions due to a protracted dry season as well as intertemporal and interregional food availability. In addition, participants of the coordination meeting agreed to continue strengthening central and local government coordination in order to control inflation through the National Coordination Meeting on Inflation Control entitled “Synergic and Innovative Inflation Control to Strengthen an Inclusive Economy.”

Jakarta, 10th July 2019
COMMUNICATION DEPARTMENT

 

Onny Widjanarko
Executive Director

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