Sri Mulyani Highlights 4 Obstacles to Global Economic Recovery

TEMPO.CO, Jakarta - Indonesian Finance Minister Sri Mulyani Indrawati has highlighted four risks that could hamper global economic recovery since the first half of 2021.

"Even though there was a positive and very good performance in the first half of 2021, we saw that there were risks that also emerged in the first half, especially in the second quarter," she said at the KiTA APBN press conference on Wednesday.

The first risk has been the emergence of the Delta variant of the coronavirus, which has increased the possibility of tightening of restrictions on public activities, hampering normal activities in many countries, she added.

The Delta variant has had a tremendous impact on the society and economy in March, April and May this year, and now the variant has spread to more than 130 countries, Indrawati noted.

Moreover, cases of the Delta variant have surged in the United States (US) and the United Kingdom after the two countries implemented massive vaccination programs, she pointed out.

The next risk has been the uneven implementation of the vaccination program among countries and within one country, leading to differences in pandemic control and economic recovery, Sri Mulyani said.

Vaccinations are currently not evenly distributed because some people are not ready to get vaccinated, as seen in several states in the US, she added. Some communities in several countries in Africa and Asia do not even have access to the program, she continued.

"Vaccination access and vaccination penetration capabilities pose risks, as the SARS-CoV-2 virus, the cause of COVID-19, will continue to be contagious and mutate as long as the disease is not treated properly," the finance minister cautioned.

Furthermore, the third risk has been an increase in inflation above five percent in two consecutive months in the US, or well above the inflation target of around two percent, she said.

The increase has affected the purchasing power of the American public, especially in the middle and lower groups, and threatened recovery, as well as given rise to various projections of the Federal Reserve's (Fed) measures in response to inflation, she added.

The last risk has been supply disruptions and rising inflation in many countries, especially developed countries, which are affecting production and increasing production costs, she pointed out.

"We see various possibilities from the supply and the increase in inflation to production around the world,” said minister Sri Mulyani.

Read also: Sri Mulyani Says Tax will Help Country Survive Pandemic Pressure

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