Jakarta (ANTARA) - High inflation, high interest rates, and weakening economic potential are currently threatening the economy of the world, including Indonesia, Finance Minister Sri Mulyani Indrawati has said.
"These three things will affect the world's economic situation, including Indonesia’s—high inflation, high interest rates, and low economic potential," Indrawati noted at a press conference on the state budget here on Monday.
The conflict between Ukraine and Russia has led to a spike in the prices of commodities that are crucial for recovery and communities, namely energy and food, she said.
The commodities whose prices have increased include natural gas, whose price has risen by 125.8 percent (ytd), coal 166.1 percent (ytd), Brent crude oil 45.7 percent (ytd), CPO (crude palm oil) 20.9 percent (ytd), wheat 55.6 percent (ytd), corn 31.6 percent (ytd), soybeans 28.1 percent (ytd), and grains 15.5 percent (ytd).
Indrawati said the increase in commodity prices has led to high inflation in several countries, especially those that did not implement shock absorbers.
"This has been directly felt by the people in those countries," she added.
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For example, Russia has recorded an inflation of 17.8 percent, Brazil 12.1 percent, the United States 8.3 percent, the United Kingdom 9 percent, Mexico 7.7 percent, South Africa 5.9 percent, South Korea 4.8 percent, and India 7.8 percent, she pointed out.
"In many countries, the interest rate immediately increased, especially the increase in the emerging was fast enough to maintain inflation," Indrawati noted.
As for Indonesia, inflation is still quite controlled, with the rate in April 2022 recorded at 3.5 percent (yoy), showing a relative increase compared to the past 24 months, she added.
"Inflation is still under control because not all the soaring prices are felt by the people. Of course, as a result, we have to provide subsidies," the minister said.