Indonesia’s Risk of Recession is Small and Global Importance is Growing Stronger

Antara News are reporting on statements made by Coordinating Minister for Economic Affairs Airlangga Hartarto and Minister of Finance, Sri Mulyani Indrawati, who accompanied President Jokowi in receiving International Monetary Fund (IMF) Managing Director Kristalina Georgieva at the Bogor Presidential Palace.

Hartarto told reporters Indonesia’s risk to experience a recession is relatively small compared to other countries. “Indonesia sees that its domestic situation is relatively good. Some countries have entered recession, but Indonesia has a very small potential for recession compared to other countries, which is only three percent,” he said.

At the meeting with Georgieva, President Jokowi conveyed that Indonesia’s economy is in good condition, illustrated by domestic inflation at 4.2-percent, economic growth at 5.01-percent, and a debt-to-GDP ratio of 42-percent. Some countries’ (debt-to-GDP ratio) is 100-percent,”  Hartarto said.

In addition, Antara News are also reporting that President Jokowi explained the budget deficit is still under control; at around four percent, the trade balance has been in surplus for 26-months, and Indonesia’s foreign exchange reserves are at USD 135-billion.

“And, Indonesia hopes that emerging countries and IMF will remain positive about Indonesia, as we are concerned about the rising inflation in several countries, (where) interest rates will enter a new regime (scheme), which is an increase in the global interest rate that will affect the investment that Indonesia urgently needs,” Hartarto elaborated.

President Jokowi expressed hope that the IMF would continue to support Indonesia’s leadership during its G20 Presidency in 2022 while Minister of Finance, Sri Mulyani Indrawati, who was also present at the meeting, suggested the IMF expected Indonesia’s leadership in the G20 Presidency to encourage leaders of the world’s largest economies, to support the actions of global institutions that have the ability to help countries facing crises.

“Ms. Kristalina said earlier that the IMF will take steps to help these poor countries who will face extremely difficult conditions. Now, it is hoped that the leadership of Indonesia under President Jokowi at the G20 meeting will be able to support the steps of institutions that have the ability to help countries that are facing a crisis,” said the Minister of Finance.

According to Sri Mulyani, the IMF conveyed to President Jokowi that the inflationary situation that has hit various countries has caused central banks to issue policies to increase interest rates. Thus, it is possible that various poor countries which are now in a very vulnerable condition will be in increasingly difficult conditions, affected by the food crisis, and also affected by the possibility of a financial crisis.

“As is currently happening in various African countries and also even countries like Sri Lanka, this will be very important because the international community’s ability to prevent crises will become weaker and the risk higher,” she added.

“Mr. President, who will host the G20 later, is very, very important to be able to mobilize the support of all G20 leaders to be able to help especially poor countries,” she continued.

During the meeting, President Jokowi also expressed his hope that African Union countries could be invited to the G20 because so far the G20 has never permanently included these countries in its discussions. Therefore, in this Indonesian presidency, President Jokowi took the initiative to invite the African Union and it is hoped that it will become a permanent decision of the G20.

“This also allows us to discuss world problems more fully because voices from countries, especially from Africa, which are currently facing a lot of food difficulties, economic and financial difficulties are very important,” she said.


Source: Antara News, President of The Republic of Indonesia website

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