TEMPO.CO, Jakarta - The relaxation of the PSBB (large-scale social restriction) is considered insufficient to boost the public’s purchasing power as the Central Statistics Agency (BPS) reported June’s inflation to be 0.18 percent month-to-month.
The Indonesian Employers Association (Apindo) deputy Shinta Kamdani said the low inflation is mainly caused by the dropping demand from the domestic market while also seeing pressures toward people’s purchasing power constantly high since mid-March.
“It’s still too early to say that the PSBB relaxation has recovered the economy because there are many factors that remain to be the source of market uncertainty,” said Shinta on Tuesday, July 1.
Shinta argues that the recovery of the economy can take place in 3 - 6 months ahead only if people’s consumption can be maintained. However, Shinta noted that there are many economic risk factors that can worsen the condition and there needs to be harder attempts to maintain a positive trend.
Meanwhile, research director of the Center of Reform on Economics (CORE) Indonesia, Piter Abdullah, said that the low inflation for the past three months is caused mainly due to the low demands. Abdullah does not deny that the drop in people’s income has affected the drop in purchasing power.
However, Abdullah said that the relaxation of the PSBB only provides enough breathing room for the business industry to not hit rock bottom.
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