Head Of Economist Bahana TCW Investment Management: Economic Crisis 2023 Longer And Accountable Compared To 1998 And 2008

JAKARTA - Head of the Economist of PT Bahana TCW Investment Management Budi Hikmat assesses that the spread and severity of the 2023 economic crisis is at risk longer and more acutely compared to previous economic crises, as happened in 1998 and 2008.

"This is driven by multi-polar geopolitical conflicts and post-pandemic polemic monetary policy that require more international cooperation, especially between hostile countries," Budi said, quoted by Antara, Wednesday, November 30.

According to Budi, economic growth has lost momentum due to the COVID-19 pandemic which was exacerbated by the Russia-Ukraine war and the United States-China trade war which increases the risk of debt for poor countries and the potential for a food crisis in a number of areas.

"The complex influence of various costs push factors after the pandemic is mainly related to wages, supply chain disruptions, spikes in energy and food costs, making it difficult for the central bank's efforts to control inflation. Further tightening policies risk triggering global stagflation," said Budi.

The Indonesian economy itself is expected to survive in the midst of a global recession storm supported by strong fundamentals.

The domestic economy in general still shows resilience with the support of increased domestic demand, maintained investment, and continued export-positive performance despite starting to show indications of a temporary weakening in September 2022.

The Indonesian Purchasing Managers' Index (PMI) continues to accelerate amid contractions and weakening manufacturing in major countries, such as Europe, China, and South Korea.

In addition to taking advantage of the increase in various income commodities (coal, nickel, CPO and rubber) which are more fast than cost commodities (specifically crude oil), the downstream program for the mineral and coal sector (minerba) strengthens economic fundamentals.

Furthermore, not only the running balance surplus, increasing tax revenue is also important in order to reduce the impact of rising fuel prices so that they are not directly borne by people who have recently faced a pandemic. The re-industrialization program is also more promising in creating skilled job opportunities to increase income and welfare.