Indonesia’s central bank and government have gone online in a bid to help keep volatile food prices and inflation in-line with official targets. On Monday, they launched a website for the Center for Strategic Food Prices Information (PIHPS), which will show prices of 10 main food commodities that impact food inflation the most.
The site shows prices of items including rice, shallots, garlic, chilli, meat and cooking oil in 164 markets in 82 cities across the sprawling archipelago.
Bank Indonesia Governor Agus Martowardojo said PIHPS data will be used for BI policymaking to “increase our accuracy in inflation expectations in the future”.
He said that improving data accuracy could help BI achieve its 2.5-4.5 percent annual inflation target range in 2018. Its target for this year is 3.0-5.0 percent.
In the past, volatile food prices have frequently pushed Indonesia’s headline inflation rate higher than the central bank’s target, especially during the Muslim fasting month of Ramadan and when supplies are low. The government has blamed food hoarding and speculators for this trend.
This year, Ramadan began in late May. Food prices have been relatively manageable, BI has said, although the headline rate was 4.33 percent in May, the highest in 14 months. May’s annual food inflation rate was 3.26 percent.
Next year, BI plans to expand data coverage to include the wholesale prices farmers get when they sell their produce. Providing such data to farmers could “avoid layers and layers of intermediary (sellers) that could distort prices,” Martowardojo said.
Finance Minister Sri Mulyani Indrawati said on Monday the government plans to propose a law to manage food prices. She did not elaborate, but slammed any one involved in causing food price distortions hurting the economy as “very evil” and guilty of a serious crime.
Last year, the trade ministry issued a decree on the reference prices for seven commodities for farmers and consumers to manage price fluctuations.