Indonesia's 2022 Inflation Reaches Highest Level in Eight Years

According to a report by the Central Statistics Agency (BPS), Indonesia experienced 5.51% inflation throughout 2022. This figure is the highest inflation rate in the last eight years, as shown in the graph.

BPS Head Margo Yuwono revealed that the highest inflation throughout 2022 occurred in the transportation expenditure group, namely 15.26% with a contribution of 1.84%.

Then, the personal care expenditure group experienced inflation of 5.91% with a contribution of 0.37%; the food, beverage, and tobacco group 5.83% with a contribution of 1.51%; and the food and beverage/restaurant provision expenditure group 4.49% with a contribution of 0.4%.

Meanwhile, the information, communication, and financial services expenditure group experienced deflation of 0.36% with a contribution of 0.02%.

"Of the 90 cities surveyed by BPS, Kotabaru recorded the highest inflation at 8.65%, and Sorong recorded the lowest inflation at 3.26% last year," said Margo Yuwono in his press release on Monday (2/1/2023).

The following are notes on events that triggered inflation in 2022:

* January 2022: A cooking oil shortage occurred, and a single cooking oil price policy was implemented.
* April 2022: An increase in avtur prices led to an increase in airfare.
* May 2022: Increased demand during Ramadan and Eid al-Fitr led to a rise in food prices.
* June 2022: Weather anomalies in various regions resulted in crop failures for several horticultural commodities, leading to price increases.
* September 2022: The government raised the price of Pertalite fuel by 30.72%, Solar by 32.04%, and Pertamax by 16%.
* December 2022: The school holiday season, Christmas 2022, and New Year's 2023 celebrations drove up the prices of food and transportation commodities.

The Central Government and Regional Governments claim to have collaborated to curb inflationary pressures through the following programs:

* Low-cost market operations
* Market and distributor inspections to prevent withholding of goods
* Cooperation with commodity-producing regions to ensure smooth supply
* Realization of unexpected spending
* Disbursing APBD support for the transportation sector

To curb inflation, throughout 2022, Bank Indonesia (BI) also raised the BI-7 Days Reverse Repo Rate (BI7DRR) benchmark interest rate five times. The total increase was 200 basis points (bps), bringing the BI7DRR to 5.5% at the end of 2022.