PMI Manufacturing Collapses, Sri Mulyani's Staff Immediately Alerts The State Budget

Illustration (Photo: Doc. Antara)

JAKARTA - The Ministry of Finance (Kemenkeu) is said to continue to optimize the fiscal function in supporting economic recovery efforts.

Head of the Fiscal Policy Agency (BKF) Febrio Kacaribu said that one of the things that are now of concern is the industrial sector which is now experiencing a decline in the Manufacturing Purchasing Managers' Index (PMI) to 50.2 in June after previously at 50.8.

According to Febrio, although it has slowed slightly, Indonesia's manufacturing PMI remains on an expansionary path because it exceeds the 50 index.

"Geopolitical turmoil and the slowdown in the world economy, especially in China, disrupted global supply chains and hampered the pace of Indonesia's manufacturing expansion, which was also experienced by most countries in Asia, including Japan, South Korea, Taiwan, Vietnam, Thailand, and the Philippines," he said in a press statement quoted Monday, July 4.

Febrio added, the government will continue to monitor the dynamics and prospects of the global economy in the future as well as mitigate various impacts that may arise.

“Various existing instruments, including the APBN, will be optimized to minimize their impact on the domestic economy. Thus, the momentum of national economic recovery is maintained," he said.

Furthermore, Sri Mulyani's subordinate explained that domestic energy prices tend to be stable because of the role of the 2022 State Budget as a shock absorber through the allocation of energy subsidies and compensation which reaches IDR 502.4 trillion.

“Energy subsidies and compensation are provided to maintain price stability, protect purchasing power and maintain the momentum of economic recovery. Considering that energy is a basic need, this energy subsidy policy is vital for the ongoing economic recovery process," concluded Febrio.