JAKARTA: Indonesia’s President Joko Widodo on Wednesday (Aug 7) said he has asked provincial governments to use their budgets to rein in transportation costs and counter the inflationary impact of last week’s fuel price hike.
Under pressure to control a ballooning energy subsidy budget, President Widodo, popularly known as Jokowi, hiked subsidised fuel prices by 30 per cent on Saturday, sparking protests across the nation of 270 million people.
“The calculation by my ministers was (inflation will) rise by 1.8 percentage points. But that’s if we do nothing. I don’t want to do nothing, we have to intervene,” Jokowi said, referring to the knock-on inflationary impact of higher fuel prices.
“Regional (governments) must take action like during the (pandemic),” the president said, adding that he told provincial leaders to use their budget to cover rising transportation costs, especially for distribution of basic foods like shallots and eggs.
The August inflation rate was 4.69 per cent, already near a seven-year high and above the central bank’s target for a third straight month due to rising food prices.