Bank Indonesia: Red Sea Conflict Delays Goods Distribution

TEMPO.CO, Jakarta - Bank Indonesia said that the conflict in the Red Sea is hampering the distribution of goods, including to Indonesia. Speaking at the Bloomberg Technoz Economic Outlook 2024 event at the Westin Hotel in Jakarta on Wednesday, the central bank's senior deputy governor Destry Damayanti said global and domestic economies are now interrelated, as seen in how global conditions are affecting the Indonesian economy.

"We cannot escape from what is happening globally. One thing is certain, there is very high global geopolitical tension at the moment," she said.

Not just the conflicts in Russia and Ukraine or Palestine and Israel, now there are other tensions such as in the Red Sea. This, said Destry, disrupted the flow of goods distribution, including to Indonesia.

"For example, the distribution of goods from Europe to Asia usually goes straight through the Red Sea or the Suez Canal, now, they need to be rerouted due to the commotion in Yemen and so on," she said.

Destry said it now takes longer for goods and supplies to be distributed, namely around 10 to 14 days.

Two other factors that greatly affect Indonesia's economic conditions, she added, are the global economic slowdown in 2024 and the gradual disinflation process.

In the global economy, she said, there is a fragmentation or difference. Destry pointed to how the United States grows better than other developed countries, while Europe is having a very difficult time. Likewise in Asia, where India is claimed to be growing solidly while China is starting to decline due to property problems and so on. "Globally, the economic growth in 2024 will trend down," he said.

DEFARA DHANYA PARAMITHA

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