Friday, March 29, 2024 | 19:01 WIB

INDEF predicts this would happen if gov’t lifts subsidy for fuel and 3-kg LPG

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LPG Subsidy
INDEF Director of Macroeconomics and Finance M Rizal Taufikurahman (Source: INDEF YouTube channel)

In addition, the increase in prices of fuel, electricity and gas will lead to higher production costs which will trigger cosh push inflation. Increase in selling prices has the potential to decrease demand for goods and services. Of course, this can reduce the competitiveness of local products vis-a-vis imported products.

If the government proceeds with the plan, it will be even more difficult to achieve the 5.2% growth target by the end of the year. Consequently, the government must provide various incentives, both to affected processing industry, as well as to maintain purchasing power, both of which will compensate for the low growth.

“The impact is that the quality, continuity, and consistency of economic growth cannot be maintained,” he said.

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