Kadin Calls The Indonesian Economy Strong Enough To Face The Impact Of Crisis In The Middle East

JAKARTA - The Chamber of Commerce and Industry (Kadin) stated that Indonesia's fundamental economic conditions are quite strong. Especially in dealing with the threat of a crisis impact in the Middle East.

Chairman of the Advisory Council of the Indonesian Chamber of Commerce and Industry (Kadin) Anindya Bakrie said in front of the Secretary General of the International Chamber of Commerce of Commerce (ICC) John Denton that when the global economy only grew by an average of 2 percent, Indonesia and a handful of countries such as India and China were able to grow above 5 percent.

"To the Secretary General of the ICC, I convey optimism that Indonesia's economic fundamentals are strong enough to face pressure and threats of crisis due to rising tensions in the Middle East. Such as the pressure experienced by the rupiah exchange rate against the United States (US) dollar this week," he quoted Antara as saying.

He continued, Indonesia's macroeconomic condition has the durability to face the threat of a crisis, both caused by geopolitical escalation and global geoeconomics. A number of indicators showing macroeconomic power include Indonesia being able to record growth above 5 percent.

Another indicator is the controlled inflation rate, well below other developed OECD member countries. Indonesia's inflation rate based on data from the Central Statistics Agency (BPS) as of March 2024 is 3.05 percent on an annual basis.

Regarding the reduction in the rupiah exchange rate which penetrated the psychological level of Rp. 16,000 per US dollar, according to Anindya, this is not the first time this has happened. Previously, in April 2020, the rupiah exchange rate had also suffered the same fate. Weakening of the exchange rate was not only experienced by the rupiah, but also other regional currencies.

"This is due to the uncertainty of geopolitical conditions due to the heating of the Middle East. Not to mention the trade war that has escalated between the US and China," he explained.

Anindya emphasized that the government and Bank Indonesia already have experience in dealing with stressful situations like what is currently happening. According to him, the most important thing is that communication with the business world is maintained so that policies can be taken that are right on target.

In addition, the indicator of debt ratio to Gross Domestic Product (GDP) is also in a safe range, which is below 40 percent. When compared to other countries, not slightly post-COVID, the debt ratio is still high, even above 100 percent.

The ICC is an institution that promotes international trade and investment systems. The ICC has a network that reaches more than 170 countries, covering more than 45 million businesses ranging from SMEs to large multinational companies.