Jakarta –
China’s inflation again insane, the highest since 26 years ago. The inflation has continued to bind over the past four months. China’s National Statistics Agency revealed that the latest inflation data in October 2021 can be seen from the Producer Price Index (PPI) soaring 13.5% in October.
“In October, the rise in PPI expanded due to a combination of imported global factors and tight supplies of key domestic energy and raw materials,” NBS senior statistician Dong Lijuan said in a statement.
Dong added that 36 of the 40 industrial sectors surveyed experienced price increases, including a spike in prices for coal mining and oil and natural gas extraction.
In addition, the Consumer Price Index (CPI), a key measure of retail inflation, increased 1.5% in October, up 0.7% in September. “This is due to the combined effects of unusual weather, mismatches in demand and supply of certain products, as well as rising costs of capital,” Dong said.
What are the implications for Indonesia?
Director of the Center of Economic and Law Studies Bhima Yudhistira said inflation in China could affect the Indonesian economy in the short term. Moreover, not infrequently buying and selling goods in Indonesia is the result of imports from China.
“Inflation in China could have a transmission to the economy in Indonesia in the short term. The high prices of basic necessities, raw materials and energy prices will affect the selling price of imported goods from China,” Bhima told AFP.
He said that the slightest change in prices at the level of Chinese producers, the prices that will reach Indonesian consumers will automatically be more expensive.
“Electronic goods, apparel and food are among those that are sensitive to disruptions in production costs in China. That’s only in terms of imported goods, yes,” he said.
Bhima also said that a worse impact could occur if China’s inflation affects commodity prices in Indonesia. He mentioned several commodities such as Wheat and Corn.
“For example, the price of wheat as reported by Tradingeconomics was observed to rise 9.5% compared to last month. Followed by corn which rose 8.5% in the same period could affect the price of animal feed. The problem is more complex because there is the threat of La Nina which makes domestic food production decline. ,” he explained.
For this explanation, Bhima asked the government to ensure that domestic food stocks are sufficient. On the business side, he suggested starting to secure raw materials or looking for other alternatives.
“So the government must be ready to secure food stocks. Entrepreneurs are asked to secure raw materials or look for cheaper alternatives,” he concluded.
(fdl/fdl)
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