Bank Indonesia Governor Outlines 5 Global Economic Challenges Next Year

24 November 2021 21:52 WIB

Governor of Bank Indonesia Perry Warjiyo delivers a presentation at the Digital Transformation For Indonesian Economy event at the Kempinski Hotel, Jakarta, Wednesday, March 11, 2020. TEMPO holds a discussion entitled Digital Transformation for Indonesian Economy themed Finding The New Business Models. TEMPO/M Taufan Rengganis

TEMPO.CO, JakartaGovernor of Bank Indonesia (BI) Perry Warjiyo predicted that the progress of global economic recovery next year will be more balanced. It is evident from the economic recovery in a number of European countries and Japan following the United States.

Meanwhile in emerging markets, the economies of India and ASEAN-5 are starting to catch up with China. This is supported by the declining COVID-19 cases, the reopening of the economic sector, and the continued stimulus for fiscal and monetary policies.

However, Perry opined that there are five challenges in the economic recovery at the global level. The first challenge is the normalization of monetary and fiscal policies in developed countries, as well as lingering uncertainties in global financial markets.

“Secondly, the pandemic impacts on corporations and financial system stability. The third is the spread of inter-country digital payment systems and the risk of crypto assets,” he explained at the BI’s annual meeting today, November 24.

The fourth challenge is the demand of a green financial economy, and the last one is the widening gap and needs for financial inclusion.

However, Perry expressed optimism that Indonesia’s economy will continue to recover with a 4.7-5.5 percent growth in 2022. “Other than exports, the consumption and investment will increase, supported by vaccinations, reopening of economic sector, and policy stimulus,” he added.

Perry was also optimistic that the next year’s inflation will be under control at the range of 2-4 percent. “The stability of the rupiah exchange rate will be maintained, given Bank Indonesia’s strong commitment amid the Fed’s policy normalization.

Read: Sri Mulyani Upbeat Economic Recovery to Strengthen in Q4 2021

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