TEMPO.CO, Jakarta - Finance Minister Sri Mulyani Indrawati said that Indonesia was dealing with two blows throughout 2019 due to the declining growth of the global economy. The two caused by drops in commodity prices and trade volumes.
According to Sri, the drops in commodity prices and trade volume were attributable to the sluggish demand of exports. This caused the current account deficit (CAD) to be widened.
“The CAD is influenced by market destination, and with low prices, we suffer two blows. Lower prices lead to lower volume,” said the minister during a meeting with the House of Representatives (DPR) at the Parliament Complex, South Jakarta, Monday, November 4.
Citing the International Monetary Fund (IMF), the World Bank’s former managing director augured the global economic growth would only be at 3 percent. The figure has been lowered since early 2018 that was predicted to start at 3.7 percent.
The global recession was followed by the domestic economic slowdown in a number of developed countries starting from the US, China, and Germany. Thus, the volume of global trade was predicted to merely 1.1 percent.
“The growth of global trade of 1.1 percent is the weakest growth since the last 10 years,” Sri said.
Sri Mulyani further stressed that Indonesia must watch out for global risks, including from the trade war of the US and China, which continuously increased the uncertainty for the global and domestic economy.