TEMPO.CO, Jakarta - Indonesian Finance Minister Sri Mulyani Indrawati revealed that current global challenges did not end with the COVID-19 pandemic which is still lingering. After the pandemic is contained, she said, complications arise.

“People suddenly need public transportation. Fuel that is not needed previously is consumed again. People who used to have meals at home now have them on campus. And families that usually stay at home are now traveling,” she said at a public lecture at STKIP PGRI Sumenep, East Java, which was broadcast live on the ministry’s YouTube channel on Thursday, February 2, 2023.

The state treasurer argued that normal public activity was not yet ready to be carried out. She pointed out that in the United States and Europe, there are goods but no trucks to transport them, and people who would like to shop but have no available goods at the stores because the service is not yet fully functioning.

Thus, people are competing to consume while the goods and services are not yet ready, leading to price increases. “This price hike is called inflation,” she remarked.

Sri Mulyani went on to say that central banks made a response once inflation occurred. In the aftermath, the US and Europe raised interest rates significantly and quickly and tighten liquidity, which lead to weakening economies again.

“This was mentioned earlier by international institutions, including the International Monetary Fund or IMF, that 2023 will be a dark year because of a phenomenon of interest rates surge that causes the economy to weaken,” she explained.

Another challenge, she continued, was the conflict between Russia and Ukraine which increased global tensions. She acknowledged that Ukraine is very far from Indonesia, but the impact is happening worldwide.

When talking about challenges and national and local economic resilience to global shocks, Sri said that it was not just a pandemic.

“It could be geopolitics, it could be an increase in inflation, it could also be disruption due to climate change, due to digital technology, which then causes energy and food insecurity,” Sri Mulyani said.

MOH. KHORY ALFARIZI

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