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High global energy prices are placing a burden on factories across Indonesia. Some are passing the higher input costs on to their customers, while others are resorting to coal as a cheaper alternative to oil.
Indonesian Chamber of Commerce and Industry (Kadin) deputy chair for industry Bobby Gafur Umar said the war in Ukraine had caused an “inevitable” increase in production costs, even if businesses implemented efficiency measures in their operations.
Inflation remained manageable in the past months, as many goods made in that time were produced with inputs brought into the country earlier, but Bobby warned that goods produced going forward would be more vulnerable to imported inflation as stocks of materials and semifinished goods needed to be replenished.
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