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Poverty has the potential to increase to 10.3 percent due to fuel price hike | merdeka.com

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Merdeka.com – Researcher Center of Industry, Trade, and Investment Institute for Development of Economics and Finance (Indef) Ahmad Heri Firdaus estimates that the level of poverty 10.3 percent in September 2022 due to rising fuel prices (BBM).

“After being analyzed, the potential for poverty could exceed the poverty level during the COVID-19 pandemic, maybe it could reach 10.3 percent in September 2022, so social assistance must be added,” said Ahmad Heri at Jakartaquoted by Antara, Wednesday (21/9).

In addition, the increase in fuel prices is also expected to make annual inflation in September 2022 to reach 1.86 percent and annual inflation throughout 2022 to reach 7.7 percent. “Economic growth will also decrease by minus 0.02 percent with the increase in fuel prices, with household consumption decreasing 0.65 percent and investment 1.7 percent,” he added.

He predicts that the real income of people in rural areas could decline by 1.28 percent to 1.63 percent due to the increase in fuel prices, while the real income of people in urban areas could decline from 1.15 percent to 2.58 percent.

“This downstream program will also face greater challenges due to the rising energy costs, because energy costs are one of the cost structures of the production cost structure,” he explained.

For this reason, the government needs to create an assistance program for business actors in the real sector who are experiencing an increase in production costs. The government is also considered to need to increase the budget for social assistance (bansos) for the community to reduce poverty.

“So the impact is quite broad and varied, not only the lower middle class who are directly affected and they are given social assistance, but from the production side, this will certainly experience pressure,” he said. [azz]

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