Global Economic Condition: World Is Not OK, Says Sri Mulyani

TEMPO.CO, Jakarta - Finance Minister Sri Mulyani Indrawati said the global economic condition is not okay as she highlighted rocketing inflations in multiple countries.

“You asked me what is the connection between inflation in the US, the UK and Indonesia? There are tons of them. Because of the inflation, the monetary authorities of those counties are responding by issuing policy that tightens liquidity and increases interest rates, which result in an outgoing capital flow,” she said in the 7^th anniversary of the Polytechnic of State Finance (PKN STAN) on Friday, July 29, 2022.

She explained weakened global economy was inevitable should the circumstances persist. She cited that this morning reports said the US economy suffered negative growth in the second quarter, meaning technically the US is already in recession.

Sri also touched on China, whose growth last week was reported close to zero. “Again, what does it have to do with us, Ma'am? The US, China and Europe are countries that become Indonesia’s export destinations. So, if they are weakened, the demands for exports are down and commodity prices will slump, too,” she explained.

Sri commented further that the ongoing war between Russia and Ukraine had exacerbated the situation due to its global impact. She said the food and energy crises occurred as Russia is presently the world’s biggest energy giant.

“Ukraine and Russia are among the world’s largest food producers, including fertilizers,” she said.

That is why, she added, it was paramount for her as the nation’s treasurer to keep the country’s finance safe and strong against all possibilities and challenges.

HENDYARTO ANGGI

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