Jakarta, CNBC Indonesia – In the midst of warnings of a dark storm that could threaten Indonesia, Finance Minister Sri Mulyani “softened” by urging her to remain optimistic even if she had to remain vigilant. This is to anticipate the risk of global uncertainty escalating at this time.
“The stability of the financial system in the third quarter of 2022 remains in a resilient condition. We remain optimistic but also vigilant in the current uncertainty. The Financial System Stability Committee (KSSK) is committed to continuing to strengthen coordination in monitoring global risk developments. , including in the preparation of political responses, “Sri Mulyani said in his Instagram account uploaded on Saturday (11/05/2022).
Sri Mulyani said that the slowdown in economic growth has indeed occurred in a number of developed countries, most notably the United States (USA), Europe and China.
“However, the improvement in the domestic economy continues to be supported by private consumption, which remains strong in a context of rising inflation, rising non-construction investment and continued export performance,” he said.
He also explained a number of Indonesia’s economic results to date that are still considered positive.
The following is the development of the Indonesian economy, quoting the notes from the Ministry of Finance (Kemenkeu):
1. The strengthening of the economic recovery of Indonesia by referring to the percentage of economic growth in the first quarter of 5.01% and then increasing in the second quarter by 5.44%.
2. Strategic sectors such as manufacturing and trade have grown expansively. The feature is that the index number is at number 50. Indonesia Manufacturing PMI is at the level of 51.8. Meanwhile, Real Sales Index (IPR) data grew 5.5% (year over year) in September 2022. On the other hand, the Consumer Confidence Index (IKK) showed broad consumer perceptions at level of 117.2.
3. There is a strengthening of consumption, an increase in exports, a surplus in the trade balance and an increase in investments, even if not yet optimal. Trade balance surplus for September 2022 of $ 4.99 bio (accumulated in 2022: $ 39.9 bio). This surplus stems from the high non-oil and gas surplus, the increase in non-oil and gas exports, as well as the influence of increased exports of commodities, especially coal and crude palm oil (CPO).
4. Indonesia’s inflation rate is much more moderate than in other countries, due to the role of the state budget as a shock absorber. Consumer price index (CPI) inflation for October 2022 was recorded at 5.71% (y / y), while volatile food inflation fell to 7.19% (y / y). Indonesia’s balance of payments (BOP) is expected to remain healthy in the third quarter of 2022, supported by the development of the trade balance which recorded a surplus of $ 14.9 billion. “
5. The state budget trend shows a positive trend. On the fiscal side, the performance of the APBN up to September 2022 recorded a budget surplus of IDR 60.9 trillion (0.33% of GDP) and a surplus of IDR 339.4 trillion in the primary balance.
“With all these results, we remain optimistic but also vigilant in the midst of the current uncertainty,” said Sri Mulyani.
Although it seems subdued, the alert attitude mentioned by Sri Mulyani had previously been recognized as the trigger for frequent “dark storm” warnings recently issued by the government. Not just once, the government has warned on every occasion of the threat of a “dark storm” in 2023 which sees economic developments in several countries.
He stressed that he did not intend to scare the public by sharing the conditions of the world. And I hope that by sharing stories about the recession, all parties can be more vigilant.
“The IMF said it will be dark in 2023. This is what is called dark. When I talk about it, it is considered scary when in fact it is not. I’m just saying there is a risk and we need to be vigilant,” he stressed. some time ago.
Where, the Ministry of Finance noted, the risks that could be caused by global uncertainty are still high, Included:
1. The scarring effect of high inflation can potentially trigger stagflation. A sharp rise in inflation will raise interest rates, which is responded to by raising interest rates.
2. The global economic slowdown affects the domestic economic growth rate. Because Indonesia’s active involvement in the global economy will certainly affect the domestic economy, but this is expected with efforts leading to economic independence.
3. The Russian-Ukrainian war that caused supply-side disruptions so much that commodity prices increased. This has an effect on Indonesia’s rising import costs.
4. The aggressive tightening of monetary policy has put pressure on the exchange rate.
5. Potential for moderating commodity prices.
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