14:29 | 31/08/2015 Global Economy
Indonesia will expand its imports of certain food items to stabilise domestic price and control inflation, Minister of Trade Thomas Lembong told the Jakarta Post.
Illustrative image (Photo:Reuters)
Foodstuff imports will not have huge impacts on the national trade balance but are closely bound to values of commodities and services, exerting significant influence on the inflation rate.
The country will be hit by spiralling inflation if it stops buying food from foreign countries, Thomas said, adding that food imports need to be maintained although it will slow down the country’s efforts to be self-sufficient in food production.
Currently, Indonesia – the largest economy in the Southeast Asian region – relies heavily on food imports to serve the nation’s increasing demands.
According to the Central Agency on Statistics of Indonesia (BPS), foodstuffs and transport costs were the largest contributors to the inflation rate in July, which was 0.93 percent. Imports saw a 17.4 percent decline compared to June 2014.
Indonesia’s exports in the first seven months of the year stood at 89.76 billion USD, dwindling 12.81 percent compared to the same period last year./.