The Indonesian Government prepares policy calibration to address the impact of the conflict between Ukraine and Russia, Macroeconomics and International Finance Expert Staff at the Finance Ministry Wempi Saputra stated.
"We do not know the extent of volatility, but the government is ready. The buffer has been prepared since now," Saputra noted during the 2022 MNC Group Investor Forum here on Thursday.
Policy calibration is conducted on account of the major impact and effect of the war between Ukraine and Russia that has not been measured in detail, he explained.
Hence, the government strives to ready a buffer.
This policy calibration encompasses methods to cover up or mitigate in the event that the Ukraine and Russia conflict brings negative impact to Indonesia.
In addition, policy calibration is conducted to prepare for the potential positive impact from the Ukraine and Russia war for Indonesia, so that it can be utilized to prepare for a more difficult time.
Thus far, the impact of the conflict between Ukraine and Russia can be observed from the rising inflation and energy supply disruption at the global level.
In the short term, one to two months in the future, the government monitors the impact from supply due to the disrupted export and import processes for commodities, such as wheat or semiconductor material.
The most sensitive aspect is the rise in global oil prices that surpassed US$100 per barrel that can potentially can affect subsidy and non-tax government revenue (PNBP), Saputra remarked.
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Meanwhile, for food prices, the ministry continues to coordinate with the Trade Ministry and Industry Ministry to calibrate the domestic demand, he noted.
"Of course, we estimate a shock to occur within three to four years into the future," he explained.
Saputra made assurance that the government had forged communication and sought policy alternatives for the procurement of food and for domestic availability.
"This is all included within our corridor and policy monitoring. Let us hope that everything would be under control," he remarked.
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