Measuring the Contribution of Strategic Commodities to Persistent Inflation; An Effort to Stabilize the Economy

Abstrak

This study aims to analyze the level of inflation persistence in the expenditure group and its contribution to eleven commodities or groups of goods/services towards the formation of inflation persistence in Blitar Regency. In addition, this study also looks at the role of the Regional Inflation Control Team in controlling inflation in the regions. This study uses monthly inflation and CPI time series data for 11 commodity groups from 2020 - 2022 recorded by the Blitar Regency Central Agency on Statistics and Central Bank of Indonesia. This period was during the pandemic and after the pandemic, when the increase in demand for public consumption led to an increase in commodity prices. In addition, Blitar Regency also has high inflation compared to other cities/regencies in East Java, especially rice and eggs which are prone to rising inflation rates. Therefore, proper inflation control is needed in accordance with the causes and characteristics of inflation. In these areas, it is necessary to carry out research related to the persistence of inflation so that the determination of government policies is right on target. This research method is the Univariate Autoregressive Model (AR) and Partial Adjustment Model (PAM) approaches. The result is evidence that inflation in Blitar Regency has a high level of persistence which is reflected in the time it takes for inflation to return to its equilibrium level, which is 19 months. The persistence of inflation in Blitar Regency was influenced by shocks that occurred in the housing, water, electricity, gas, and fuel groups, as well as the transportation group as representatives of the administered prices component and the food, beverage, and tobacco group. as a volatile food component. In addition to controlling volatile food component inflation due to shocks such as bad weather, the Regional Inflation Control Team can collaborate with relevant agencies to use technology to minimize the impact of climate change, maximize the potential of regional superior products/commodities, and maximize production to maintain supply availability.