Indonesia’s headline inflation dropped to 4.69% in August, down from July’s 4.94%, when the rate hit the biggest year-on-year climb since October 2015.

Consumer prices are rising sharply in Southeast Asia’s largest economy, which is suffering from surging oil prices and disruptions in global supply chains caused by Russia’s invasion of Ukraine. Indonesia is a net importer of oil and heavily reliant on food imports such as wheat.

President Joko “Jokowi” Widodo is under pressure to tackle the rising costs of fuel and food since surging prices often lead to social unrest and political instability in Indonesia.

“The world is facing a very difficult situation, starting from the Covid-19 pandemic that (the country) has not yet recovered from and some countries still having a high number (of cases), and then there is a war, food crisis, energy crisis, (and) financial crisis,” Widodo was quoted in the state news agency Antara as saying in mid-August.

At the national coordination meeting on inflation control in mid-August, Jokowi asked home affairs minister Tito Karnavian to control inflation at the regional level.

According to a statement released by Indonesia’s cabinet secretariat last week, Karnavian urged all regional leaders in the country “to optimise state budget in order to control inflation at a regional level including maintaining price affordability, people’s purchasing power, smooth flow of distribution and transportation, food price stability, and food supply”.

To support the government’s efforts to tame inflation, the central bank raised its benchmark interest rate in August for the first time in nearly four years. The move, which will help keep the currency afloat and stabilise import prices, followed aggressive tightening by neighbouring central banks and the US Federal Reserve.