DIGIVESTASI - As the end of Joko Widodo’s (Jokowi) nearly 10-year presidency approaches, inflation in July 2024 was recorded at 0.89% (year-to-date/YtD) or 2.13% (year-on-year/YoY). This figure remains below Bank Indonesia’s inflation target for 2024, which is set at 2.5%±1%. The Consumer Price Index (CPI) is used as the primary indicator to measure inflation and monitor the general rise in prices of goods and services. Based on data from the past 10 years, the highest annual inflation occurred in 2022, during the transition from the Covid-19 pandemic to endemic status, with a rate reaching 5.51% (YoY).

The inflation spike in 2022 was triggered by adjustments in subsidized fuel prices implemented by Jokowi in September 2022. The price of Pertalite rose by 30.72%, diesel by 32.04%, and Pertamax by 16%. Consequently, inflation sharply increased from 1.87% in 2021. The 2022 inflation rate became the highest since the beginning of Jokowi’s leadership in 2014.

During Jokowi’s first term, inflation remained stable, averaging around 3%. Approaching his second term, or in 2019, inflation even dropped to 2.72% for the entire year. This contrasts with the inflation trend during the tenure of Indonesia’s sixth president, Susilo Bambang Yudhoyono (SBY), which tended to be more volatile and even reached double digits. SBY inherited an inflation rate of 6.4% in 2004. In his first year in office, inflation surged to 17.11% in 2005, due to the fuel price hikes in March 2005.

The fuel price increase had a significant impact, with monthly inflation in October 2005 reaching 17.89% from the previous month’s 9.06%. Key commodities that saw dominant price increases during that month included gasoline, kerosene, diesel, as well as intercity and intra-city transportation. However, annual inflation in 2006 and 2007 then eased to around 6%, before surging again in 2008 to 11.06%, coinciding with the global financial crisis. During SBY’s presidency, inflation was recorded below 5% only three times: in 2009 at 2.78%, in 2011 at 3.79%, and in 2012 at 4.3%. At the end of his term in 2014, SBY recorded inflation at 8.36%.

Indonesian Inflation 2004-2023
SBY and Jokowi Era

INGGRIS

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