OJK Boss Believes Global Economy Avoids Recession

JAKARTA - Chairman of the Board of Commissioners (DK) of the Financial Services Authority (OJK) Mahendra Siregar said that the world economy in 2024 began with market optimism that various policies had been carried out to reduce uncertainty. Thus, he believes that the global economy in 2024 is expected to avoid recession.

"The global economy is expected to avoid recession, but various down sides risk still color PE," he said at the 2024 Financial Services Industry Annual Meeting, Tuesday, February 20, 2024.

According to Mahendra, despite avoiding the recession, there is still a downside risk or a risk of a decrease seen from the loan burden, increasing debt costs, weak demand and the divergence of recovery in large countries in the world.

"In addition, various geopolitical risk factors and the potential change in political policy from various elections in other major countries to unknown variables that need to be observed. As a result, the projected world economic growth is expected to be slow this year," he said.

On the other hand, Mahendra conveyed the positive performance of the Indonesian economy in 2023, supported by the financial services sector which grew positively as reflected in the strong capital structure, adequate liquidity, and risk profiles maintained from intermediation of double-digit body financing and receivables.

"Meanwhile, raising funds in the capital market has succeeded in exceeding the target of IDR 200 trillion with the number of new issuers setting a record high compared to other regional countries. This is offset by investor growth which has reached five times in the last four years," he said.

On the other hand, Mahendra sees that in the midst of monetary policy and investment current pressure, the liquidity of the financial services sector is maintained above the threshold even though its influence has been seen with the growth of thermoderated DPK.

"Even though the impact of the DPK is moderated to the solvency of the financial services industry, solid shocks, both in banks, multifinance, insurance, pension funds, CAR banks 27.65 percent above the Covid restructuring credit area continue to decline, in fact, we are sure that the normalization transition is well supported by the adequacy of the reserves that have been formed so far," he said.

Mahendra said this achievement was supported by industry and better synergy between the authority of the financial sector of OJK, Ministry of Finance, BI and LPS who are members of the KSSK.