Global Conditions Filled With Uncertainty, US Economy, China To Europe Are Still Weak Until The End Of The Year

Photo: Aris Nurjani/VOI

JAKARTA - Finance Minister Sri Mulyani Indrawati said that global economic conditions were still filled with uncertainty until the end of this year as reflected in the slowing economic conditions in the United States (US), Europe, and China.

"We see that from America inflation is still above the target and interest rates are still high, higher for longer even though in these weeks America has signs the interest rate is at its peak," said Sri Mulyani during the presentation of our State Budget, Friday, December 15.

Sri Mulyani explained that the US economy was also faced with high fiscal pressure and the US public's access saving was still eroded due to inflation.

"This will overshadow the prospect of weakening the US economy. The good news is that the United States will not experience a recession," he explained.

Meanwhile, China is still overshadowed by a weakening of the economy that has not shown any signs of ending. In addition, other factors that are the weight of China's economy come from workers' demographics, use, and property criteria.

Meanwhile, Europe is experiencing a sharp economic downturn. Even Germany and Britain experienced an economic contraction.

The fiscal deficit is high, the inflation, especially core inflation, is still high. This is why Europe's interest rate pressure has not shown yet at its peak," he said.

In addition to economic problems, geopolitical conditions are also still showing high risks as reflected in the occurrence of wars in Ukraine and Palestine that have not shown any signs of ending.

"It raises a down side risk towards the prospect of economic growth. Global sentiment will also cause volatility in the financial sector," he explained.

According to Sri Mulyani, the unfinished geopolitical problem will lead to protectionism, weakening global trade.

The global economy is expected to remain weak. As stated by international institutions, "he said.

Furthermore, Sri Mulyani said that the global economy will still weaken. "Next year, the IMF (International Monetory Fund) still estimates that world economic growth has not improved," he said

Akibat kondisi tersebut, Sri Mulyani menyampaikan pertumbuhan ekonomi dunia direvisi. IMF menurunkan target pertumbuhan ekonomi dunia menjadi 3 persen dan Bank Dunia menurunkan target menjadi 2,1 persen pada tahun ini.

"For next year, the IMF still estimates that economic growth has not improved, even at the level of only 2.9 percent," he said.

Sri Mulyani said that the decline in inflation was still in the projection set by developed countries, namely 3 percent and world inflation was targeted at 5.8 percent in 2024.

Meanwhile, when viewed from the projected growth of GDP for ASEAN and G20 countries, several countries are shrouded in uncertainty.

"Indonesia is one of the countries that has the highest economic growth performance in the ASEAN and G20 environments, which are at 5 percent," he said.