MetroTV, The Central Statistics Agency (BPS) reported that inflation in 2024 was 1.57% year-on-year (YOY), the lowest since 1958. This low inflation is not something to be proud of, nor should it make you complacent. It is not an achievement but an alarm for stakeholders. Low inflation, although it sounds positive, on the other hand indicates a fundamental problem in the nation's economy. Indonesia is not doing well, because it is faced with major challenges in maintaining sustainable economic growth. This challenge arises due to weakening public demand. The purchasing power of the population, especially the middle class, has continued to decline in the past year. In fact, household consumption tends to grow below 5%. In the first quarter of 2024, household consumption growth was 4.91%. In the following quarter, it rose slightly to 4.93% and fell again to 4.91% in the third quarter of 2024. There are many factors that make the purchasing power of the middle class low. Starting from the absence of income increases, the large debt burden, the high prices of basic necessities, to the uncertainty of policy direction, especially the dynamics of the planned increase in the value added tax (VAT) rate to 12%. Fortunately, the 12% VAT is only applied to luxury goods. The above conditions certainly must receive great attention because the number of middle class and heading towards middle class in 2024 is 66.35% of the total population of Indonesia. It is very dangerous when more than half of the population experiences economic difficulties. Economic sectors that depend on domestic consumption will have difficulty developing. Therefore, a more proactive economic policy is needed to stimulate consumption and maintain people's purchasing power. The public certainly appreciates the hard work of Bank Indonesia (BI), the government, and all related parties. The central bank, for example, claims that core inflation is maintained low as a result of consistent monetary policy, as well as close synergy in controlling inflation between BI and the government, both central and regional. Meanwhile, Coordinating Minister for Economic Affairs Airlangga Hartarto assessed that the low inflation achievement throughout 2024 was inseparable from various factors, both external and domestic, as well as the success of the inflation control policy coordinated by the National Inflation Control Team (TPIN). The 2024 inflation of 1.57% was also considered to still be within the government's target, namely in the range of 2.5% plus minus 1% or 1.5% at the lowest and 3.5% at the highest. One of the factors causing the 2024 inflation to be relatively low was that food prices, which had soared in 2022-2023, tended to decline last year. The stability of food prices reduced pressure on household budgets, which were previously under pressure due to the high price of food ingredients. Several commodities such as red chilies which experienced deflation of 46.53% and cayenne peppers which experienced deflation of 39.74% helped reduce inflation. Likewise, gasoline also experienced deflation of 1.86% and air transportation fares which experienced deflation of 7.26%. The various efforts made by BI and the government certainly should not be ignored, especially if overall price stability occurs. However, the public once again urges that the fundamental issue of improving people's purchasing power, especially the middle class, should not be forgotten. Moreover, BPS sees the potential for weakening purchasing power to continue in 2025, if the government has not been able to encourage household consumption for the lower middle class. So, there is no need to boast about low inflation. Don't be dazzled by something that is too much. Too high is bad, too low can also be problematic. So, don't be careless, be vigilant. #bedaheditorialMI #bewareoflowinflation #inflation #mediaindonesia #metrotv ----------------------------------------------------------------------- Also follow our social media to get the latest information updates! Website: https://www.metrotvnews.com/ Facebook: / metrotv Instagram: / metrotv Twitter: / metro_tv TikTok: / metro_tv Metro Xtend: https://xtend.metrotvnews.com/