Sri Mulyani Reveals The World Towards A Multipolar Era, Hambut National Economic Growth

Minister of Finance Sri Mulyani Indrawati said that by 2025, the government will continue to be aware of the dynamics of the global economy which is still filled with uncertainty.

According to him, the world order is currently experiencing a shift into the multipolar era where geopolitical fragmentation and increasing rivalry between countries have eroded the spirit of globalization and multilateral cooperation, which is now being replaced by the spirit of protectionism and nationalism with the My Country First approach.

"Escalation of geopolitical conflicts has even broken out into military wars, becoming a major obstacle to the recovery of economic activity, hampering the flow of trade and investment, and increasing the volatility of financial markets," he said at the 21st plenary session of the DPR RI, Tuesday, July 1.

Sri Mulyani said that global economic growth experienced a weakening as reflected in various projections such as the World Bank in June 2025 projecting global growth of only 2.3 percent, while the IMF projection in April showed 2.8 percent.

Furthermore, he added that major economies such as the United States, China, Japan, and the European region also experienced revisions to lower growth.

According to him, this uncertainty is further exacerbated by fluctuations in commodity prices, exchange rates, and interest rates which are still high.

"The global economic situation that continues to be under pressure also has an impact on the domestic economy," he explained.

He said that this pressure was seen in the first quarter of 2025, Indonesia's economy grew by 4.87 percent (yoy), supported by household consumption which grew 4.89 percent.

Sri Mulyani said that the new government is also making adjustments through efficiency and institutional restructuring measures, including the reconstruction of shopping allocations to make them more productive and create added value.

"In terms of investment in the first quarter of Indonesia only grew 2.12 percent year on year. This is a fairly low growth reflecting global uncertainty and also uncertainty in terms of confidence for economic actors to be able to take investment actions," he said.