More than half of the world saw an increased risk of civil unrest since the start of the COVID-19 pandemic. The Russian invasion of Ukraine worsened the situation, causing disruption to energy markets and food supply chains, and triggering price hikes.
The Indonesian government is looking at ways to "normalize" the energy subsidy budget. One-fifth of the state budget is at risk of being used up for this need this year.
Key points: energy price increase signal a rise; limited infrastructure budgets; social protections budget drop, while several tax incentive programs stop as the economy further recovered.
Foot and Mouth Disease (FMD) is spreading fast in Indonesia. Within three months, the disease has affected 447,257 cattle, buffalo, goats, and pigs in 22 provinces, forcing the government to establish a Specific State of Emergency for FMD.
“Pressures might increase on the rupiah as capital outflows continue and commodity prices ease. Bank Indonesia has stated its readiness to adjust its policy interest rate.”
PT Pertamina (Persero) plans to restrict people from purchasing three-kilogram canister liquefied petroleum gas (LPG), Pertalite, and diesel fuel by utilizing an information technology system.
The task of solving global inflation will fall to the world's major central banks. Domestically, the Indonesian government is expected to maintain subsidized-energy prices to prevent wild inflation and aggressive interest rate hikes.
Indonesian high-ranking official reveal the plan to gradually increase energy prices after postponing it for quite some time. Several existing policies in the energy sector can prevent excessive price increases.
The recent surge in global prices can heavily impact Indonesia. Budgets challenges are in the spotlight as energy and non-energy commodity prices jump.
