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The reflation called “Satan” has already haunted Indonesia!

Jakarta, CNBC Indonesia – The global economy is still haunted by uncertainty. This will also impact the Indonesian economy. Indeed, the world is currently facing the threat of reflation.

The threat of reflation in the world economy was first voiced by Bank Indonesia (BI) Governor Perry Warjiyo

Perry said that the threat of reflation happening globally today is caused by a recession, but on the other hand, there is also high inflation.

“There is a risk of stagflation, growth is stalled but inflation is high. In fact, the terms are reflation, risk of recession and high inflation,” Perry said during a working meeting with Commission XI of the DPR , (Monday 21/22/2022).

And as for the Indonesian economy, is there any reflation potential?

BCA Chief Economist David Sumual explained that reflation is basically the opposite of slowing or even negative economic growth, but high inflation. This state of reflation is what David said Indonesia is currently experiencing.

“Yes, Indonesia is more reflationary. The Indonesian economy is not stagnant and inflation is indeed rising,” he told CNBC Indonesia on Monday (11/21/2022).

David said that in many periods Indonesia has also experienced reflation, one of which occurred in 2008. “Indonesia has experienced many periods of reflation, like in 2008 we too reflation,” he said again.

The existence of reflation in Indonesia has an impact on people’s purchasing power. Because even if the economy is growing, inflation is high and keeps purchasing power in check.

The only way to increase purchasing power is to keep the inflation rate from rising sharply.

“Inflation has to be suppressed somehow, because economic growth is difficult to pursue this year and next year. So at least the way out for Indonesia is to control inflation,” David explained.

Of note, Indonesia’s economic growth in three consecutive quarters increased.

In the first quarter of 2022 the Indonesian economy grew by 5.01% (yoy), then in the second quarter of 2022 the domestic economy grew by 5.44% (yoy), and in the third quarter of 2022 increased again, with economic growth reaching 5.72% (year on year).

Meanwhile, Indonesia’s inflation rate has fluctuated over the past three months from August to October 2022.

Inflation in August 2022 reached 4.69% (yoy), then the inflation rate jumped to 5.95% (yoy) in September 2022. Meanwhile, in October 2022 the Indonesia’s inflation was lower than the previous month which reached 5.71% (y/o).

[Gambas:Video CNBC]

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