Indonesia Must Anticipate Stagflation And Mitigation Of Global Economic Risks

JAKARTA - Economic observer Yanuar Rizky said that the increase in the copper (copper) or gold ratio shows that the world's production sector, particularly in the US and China, is starting to become active again, however, the ratio is currently still showing a decline.

According to him, this indicates that the global hedge fund is rebalancing the position of inflation, which is reflected in rising copper prices, while storing gold as an instrument to overcome uncertainty.

"That's why the trend throughout 2025 is stagflation," he said in his statement, Wednesday, March 26.

Yanuar said that the stagflation had begun to appear from existing trends, both ahead of the curve and on the curve.

As for the next curve side, it can be seen that there have been earlier recovery efforts, while from the on-the-curve side, this is reflected in the Fed's decision to hold interest rates even though inflation and unemployment rates have shown recovery.

On the other hand, the Bank of Japan (BOJ) policy towards high interest rates and normalization of the monetary balance by selling debt securities, as well as similar steps taken by the ECB (Europe) and PBoC (China), reflects efforts to prevent a property crisis that could shake the financial market, especially after declining production in China.

Therefore, he conveyed that in Indonesia, the challenges are quite large because of the poor quality of state spending in the last 10 years, as well as the addition of debt securities, are now a burden with high maturity in the midst of stagflation.

In addition, Yanuar conveyed that the slowdown in exports-imports with China and the tight money supply due to the Fed and BOJ policies also burdened the economy. Therefore, the steps that need to be taken are to create trust in the government, facilitate transactions between social classes, mitigate potential social conflicts, and enforce laws related to corruption, collusion, and nepotism.

"So that prioritizing the curve before these issues were used by the market to encourage the deterioration of Indonesia's financial markets when fiscal burdens widened and monetary costs increased, elements of perception issues could make the situation worse," he explained.

Yanuar said Indonesia could learn from China's condition in March 1998 which was able to move on to resolve issues that could potentially be detrimental so as not to be trapped in conditions that failed to manage fiscal properly.

"We must learn from China (March 98) that step in front of the curve sweeping the issue that could stab it, we should not be like Bangladesh 2024 whose government is fun on its own and creates social conflicts when fiscal is limited to social assistance during the stagflation period," he said.