Sri Mulyani: Indonesia's Economy Grows Strong Amid Global Turbulence

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

JAKARTA - Minister of Finance (Menkeu) Sri Mulyani revealed that the Indonesian economy is one of the ones growing strongly in the midst of various global turmoil.

According to him, Indonesia, China, and India consistently grow above global growth.

This was revealed by the Minister of Finance (Menkeu) Sri Mulyani Indrawati during a working meeting with the DPR's Budget Agency (Banggar) earlier this week.

"The three emerging countries have excellent economic growth performance, but each has challenges," he said in a press release quoted on Wednesday, May 31.

The Minister of Finance explained that after the 2008 global financial crisis, the global economy was slowing down and exacerbated by the start of the trade war between the US and China in 2017. Furthermore, the COVID-19 pandemic has also caused a deep contraction globally.

"Here we see Indonesia and India are among those who recover the fastest, even though they are faced with a geopolitical crisis," he said.

The Minister of Finance added that Indonesia's fiscal policy has proven effective in encouraging economic growth, including during the pandemic. Among the G20 and ASEAN countries, the increase in Indonesia and Vietnam's GDP is greater than debt, while the majority of other countries, the increase in debt is actually higher than their respective GDPs.

"After that doesn't mean our challenges are getting easier. We see geopolitical tension as the dominant factor and the same as where politics is unpredictable, the impact is shock that cannot be created," he said.

In addition to geopolitical tensions, the Minister of Finance emphasized that the threat of the emergence of a pandemic, climate change, and digitalization is a challenge that needs to be watched out for in the future.

The country treasurer said these things would be a game changer and change the global constellation for the next decade.

"To deal with uncertainty, Indonesia must be able to create resilience, in an atmosphere that is uncertain, it must be maintained with Indonesia's economic resilience," he stressed.

The Minister of Finance said that the trend of Indonesia's economic recovery continued strongly where GDP grew above 5 percent in 6 consecutive quarters.

Sri Mulyani explained that this growth was supported by all aggregate demand that had recovered after the pandemic, namely household consumption, government consumption, investment, and export-imports.

Meanwhile, from production components such as manufacturing, trade, mining, agriculture, construction, transportation, and accommodation also recorded positive performance.

"Regionally, we have also seen that recovery has been contributed by all regions," he added.

Sri Mulyani continued, quality economic recovery was able to reduce unemployment and poverty.

Economic recovery in 2021-2022, was able to create jobs as many as 6.8 million people (neto), so that the unemployment rate fell to 5.45 percent.

The strengthening of the Social Protection (Perlinsos) program has also significantly driven the reduction in poverty and inequality levels.

The poverty rate fell from 11.0 percent in 2014 to 9.57 percent in 2022.

Then the ratio now fell sharply from 0.414 in 2014 to 0.381 in the 2022 period.