INDUSTRY.co.id – JAKARTA – The Indonesian government has reaffirmed its commitment to controlling inflation by announcing fiscal incentives for regional governments that demonstrate effective inflation management. The incentives, jointly presented by Minister of Finance Sri Mulyani Indrawati and Minister of Home Affairs Tito Karnavian, are designed to reward and motivate regional administrations to prioritize price stability as a key policy objective.
The announcement was made during the Presentation of the Current Year Fiscal Incentive Award for Stage III Inflation Control, where regional governments that successfully met inflation control benchmarks received financial recognition and additional budget allocations to support further anti-inflation measures.
"Regional governments play a critical role in managing inflation at the local level. By incentivizing good performance, we are creating healthy competition among regions to deliver better outcomes for their communities," Finance Minister Sri Mulyani said at the event.
Minister of Home Affairs Tito Karnavian added that the incentive program strengthens the coordination mechanism between the central government and regional administrations on economic management. He urged regional heads to maintain focus on food price stability, supply chain resilience, and market surveillance as key levers for keeping inflation in check.
Inflation in Indonesia has been a key policy concern, particularly following disruptions to global commodity markets and supply chains in the aftermath of the COVID-19 pandemic and geopolitical events. The government has deployed a range of instruments including price subsidies, market operations, and coordination with food distribution agencies to moderate inflationary pressures.
The fiscal incentive program is part of a broader framework to strengthen fiscal decentralization and improve governance outcomes at the regional level. Regions that receive incentive funding are expected to allocate additional resources toward programs that directly benefit low-income households most vulnerable to rising prices.
