VOI - Voice of Indonesia | RRI - Radio Republik Indonesia

The government's policy to reduce subsidies for fuel oil (BBM) has made the Indonesian economy stronger. This was conveyed by the Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan.

"Regarding the subsidy, there really is no choice, we have to do it. I think it will make the Indonesian economy stronger in the future because subsidies are getting less and less," Luhut told reporters, Wednesday (7/9/2022).

Therefore, he said, the reduced subsidy burden would be better for the state's finances. Luhut said the smaller the subsidy released to the market mechanism, the better.

"But we can't be purely a 100 percent market mechanism. Because our people are small, we still have to give subsidies, but subsidies are right on target," he said.

On the other hand, Luhut said, Indonesia's economic performance is one of the best in the midst of world pressure. Indonesia's inflation rate in August 2022 was at 4.69 percent.

"This is quite good when compared to world countries. Like Russia at 15 percent or the US at 8.5 percent," he said.

Likewise, economic growth is still at 5.44 percent in the second quarter of 2022. This figure is considered an indicator of a fast and strong economic recovery after the pandemic.

"I think we can see that we are all doing well, our inflation is still maintained at 4.9 percent. Actually, our biggest inflation comes from food to 11.4 percent. But we can suppress it," he said.

Luhut also said that the structure of transportation costs is among the largest in numbers, especially with the increase in fuel prices. However, the government's policy of providing assistance in diverting fuel subsidies will be able to suppress inflation in the transportation sector.

"So the transportation will be given subsidy funds, the funds are already in the regions. Now it's just the legal umbrella, I think it has been signed today," he said. (RRI)