Yogyakarta, The Indonesia Post – Coordinating Minister for Economic Affairs Airlangga Hartarto said the Russia-Ukraine conflict, which had an impact on the increase in various energy and food commodities, would encourage inflation.
“This will encourage inflation because international (commodity) prices and domestic prices are very different,” said Airlangga when he was a keynote speaker at the “Recover Together, Recover Stronger: G20 and Indonesian Strategic Agenda” seminar at the Senate Hall of Gadjah Mada University (UGM), Yogyakarta, Thursday.
He said the conflict between the two countries had triggered the skyrocketing prices of a number of food commodities, such as vegetable oil and wheat imported from Ukraine.
“They are a supplier of 40 percent (wheat) globally and Indonesia is also dependent on Ukraine for wheat imports,” he said.
In addition, according to Airlangga, the conflict also contributed to an increase in world oil prices, which rose to US$110 to US$125 per barrel and also contributed to inflation.
“The price of nickel, which was never seen yesterday, could reach 100 thousand (US dollars), coal could reach 400 US dollars (per ton),” he said.
Therefore, he ensured that the Indonesian government would immediately take a number of steps to overcome the spike in commodity prices.
“Apart from cooking oil, soya beans (soybeans) will also be affected. So those are various commodities that need to be handled by the government,” he said.
However, Airlangga assessed that the conflict between Russia and Ukraine had not yet had a big impact on Indonesia’s trade activities.
“In a situation of tension in Europe due to the geopolitical war between Russia and Ukraine, for Indonesia the trade effect is not too big because Indonesia’s trade with Russia and Ukraine is around 2.3 billion (US dollars),” said Airlangga. (mhn/bbs)
Comment