Sri Mulyani Warns, Recession Threats In Many Countries Still Potential

Minister of Finance Sri Mulyani Indrawati. (Photo: Doc. Ministry of Finance)

JAKARTA - Minister of Finance (Menkeu) Sri Mulyani warned that the potential for a recession due to rising benchmark interest rates, tightening liquidity, and rising food and energy prices, which created a crisis of its own, was very real for many countries.

"I hope that in this case, Indonesia will be able to continue to navigate other additional challenges for our economy and now in the global economy," Sri Mulyani said at the Launch of the 2022-2025 IsDB Group's Member Country Partnership Strategy (MCPS) for Indonesia. , Tuesday 19 July.

In that context, he said Indonesia's first strategy was to address many structural problems including the quality of human resources, infrastructure, productivity, and competitiveness.

Dealing with human resource issues in the form of education, research, innovation, as well as in terms of health is certainly not easy and takes time. But of course this will require consistency in the medium to long term.

Furthermore, the State Treasurer added, the second strategy is about reforming the health system, where the pandemic has opened up other aspects of reform that need to be carried out on the health system.

"Indonesia is one of the few countries in the world that has successfully managed a pandemic, if you measure it across all indicators. But this does not mean that we are done with our health system," he said.

Navigating the threat of a pandemic, which is now being followed by a new threat, said Sri Mulyani, is not an easy task for a country as big as Indonesia.

The threat is in the form of rising inflation due to food and energy prices due to geopolitical situations, rising inflation in many developed and developing countries, which is then followed by tightening monetary policy, namely increasing interest rates and tightening liquidity.

"This in itself will create an addition that has the potential to disrupt many economies, especially those who are already in a very fragile situation," said Sri Mulyani.