By: Moch. Irfandi )*
Bank Indonesia (BI) said Indonesia’s economic fundamentals are in good shape. However, there are still four summary of the challenges facing the Indonesian economy in 2017.
Director of Economic and Monetary Policy BI Yoga Affandi explains, there are four challenges facing the Indonesian economy. First, the risk of rising inflation. “Inflation remains under control even under pressure in early 2017. Inflation in 2016 is very low, but in 2017 there was an increase, several causes such as administered prices (component prices regulated by the government), vehicle registration fees, electricity, phone bills that led to high inflation contribution.
The second challenge is the exchange rate pressure due to the many challenges of the world economy. However, the word Yoga, Indonesia’s economic fundamentals are much better compared to countries in the region.
The third challenge is, if inflation cannot be managed properly, then the impact will impact the gross domestic product (GDP) of Indonesia. Yoga said, this will particularly affect low-income people. Especially the lower income can be eroded by rising inflation on the purchasing power.
The fourth challenge, a challenge that alert the central bank is the rigidity of lending rates. Yoga states, central banks respond to this challenge by encouraging macro prudential policy.
With a wide variety of challenges, it can be said that the condition of Indonesia’s economic fundamentals are still quite good and strong. This condition is expected to lead to the stability of the exchange rate and also through its main efforts of the central bank to continue to make efforts to stabilize the rupiah. In addition, controlling the inflation rate must be started from the community itself with the micro to the macro scheme through controlling the distribution of money in the community through a culture of saving, so that the inflation rate does not further depress the lower economic community.
)* Political Economy Writer
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