Inflation Overshadows Poverty Reduction Efforts

The government's efforts to reduce poverty during the Covid-19 pandemic are overshadowed by the potential for price increases for a number of basic necessities.

If it is not accompanied by an increase in income and strengthening purchasing power, vulnerable people can fall back into poverty. The Central Statistics Agency (BPS) noted, as of September 2021, there were 26.5 million poor people in Indonesia or 9.71 percent of the total population. That number decreased by 1.05 million people compared to the position in September 2020. At that time, in the first year of the pandemic, the number of poor people jumped to 27.55 million people or 10.19 percent of the total population. BPS defines the poor as those who have an average monthly per capita expenditure below the poverty line. The poverty line expenditure limit as of September 2021 is IDR 486,168 per capita per month or IDR 2,187,756 per poor household per month. The spending limit for the poverty line rose 5.5 percent or Rp 27,221 compared to September 2020. The increase was mostly influenced by food commodity prices, which contributed 74.5 percent to the total increase. According to the Head of BPS Margo Yuwono, if not accompanied by an increase in wages or adequate income, the spike in the prices of food commodities and other goods this year could trigger an increase in the poverty rate. Several food commodities have experienced significant price increases this year due to a number of factors. The commodities, for example, are cooking oil, chicken eggs, and red chilies. The government also plans to increase the rate of Value Added Tax (VAT), cigarette excise, and electricity tariffs this year. “Inflation itself does not necessarily affect the poverty rate. What is worrying is that people's incomes do not increase, while inflation is getting higher," he said

|•SOURCE•| Articles :KOMPAS | Image :CERMATI |

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