TEMPO.CO, Jakarta - Indonesian Finance Minister Sri Mulyani Indrawati assessed that uncertainty in the global economy is likely to persist until the end of the year. She pointed out that the United States is still grappling with high inflation, even though there are some signs that interest rates may have peaked in recent weeks.

“Although there may be some good news that America is quite optimistic that it will not experience a recession as was feared last year,” Sri said at the December 2023 edition of the National Budget Press Conference at the Finance Ministry Building, Central Jakarta, on Friday, December 15, 2023.

Meanwhile, China is facing a weakening economy that shows no signs of ending due to various medium-term structural factors such as demographics, an aging workforce, and the real estate crisis.

Europe's economy has also weakened quite sharply, with countries like Germany experiencing an economic contraction and the United Kingdom having high budget deficits and inflation, especially core inflation.

“These are causing Europe to experience a state of pressure where interest rates are not yet showing signs of having peaked,” Sri added.

Aside from economic problems, the state treasurer also highlighted geopolitical risks in Ukraine and the Middle East, particularly Palestine, that could increase the uncertainty. “The global economy is expected to remain weak [in 2024].”

Citing data from international institutions, Sri pointed out that the International Monetary Fund (IMF) expected global economic growth in 2024 to fall to just three percent, while the World Bank expected 2.1 percent. On the other hand, inflation, although declining, is still above the target of three percent set by developed countries.

“At 5.8 percent, global inflation is higher than it was before the COVID-19 pandemic,” said Sri Mulyani.

MOH. KHORY ALFARIZI

Editor's Choice: Indonesia's Inflation Continues to Slow Down Next Year, Economist Says

Click here to get the latest news updates from Tempo in Google News