Internalization of Vision Target Indicators and Development Indicators 2025-2029

The relevance of inflation to development policies or issues is explained in the internalization related to inflation which was attended by all Heads of BPS Regency/City throughout Indonesia on Wednesday, May 14, 2025. This internalization is also a forum for discussion regarding the differences in the IPH (Price Movement Index) figures calculated for non-IHK regencies/cities with the IHK (Consumer Price Index) figures calculated in regencies/cities that calculate inflation.

High and uncontrolled inflation can disrupt economic stability, which is an important prerequisite for long-term development. Governments usually adopt monetary and fiscal policies to keep inflation under control. When preparing the Medium-Term Development Plan (RPJM) or Government Work Plan (RKP), inflation is one of the variables used to:

• Determine budget allocation

• Estimate future project costs

Example: If the government plans to build a road next year, and inflation is estimated to be 5%, then next year's budget will be adjusted up by 5% so that the real value of the project remains the same.

Use of Inflation in Food Security Policy, for example, Inflation of food commodities is a primary consideration in planning a food security program.

Example: If the price of rice soars, the government designs a price stabilization program (for example through market operations, government rice reserves, or distribution transportation subsidies).