Japan Enters The Recession Abyss, Coordinating Minister Airlangga Says The Indonesian Government Will Prepare Anticipation

Coordinating Minister for Economic Affairs Airlangga Hartarto. (Photo: Doc. Antara)

JAKARTA - Coordinating Minister for Economic Affairs Airlangga Hartarto opened his voice regarding the entry of the Japanese economy into a recession. This is because Japan is one of Indonesia's main trading partner countries.

For information, the Central Statistics Agency (BPS) noted that Japan is the 4th largest export destination country for Indonesia. In January 2024, Indonesia's export value to Japan reached 1.46 billion US dollars or the equivalent of around Rp. 22.78 trillion.

It is known, Japan has reported contractions for two consecutive quarters. Japan's economy slumped 0.4 percent on an annual basis in the fourth quarter of 2023 after reporting a 3.3 percent contraction in the previous quarter.

In addition, Japan's fourth-quarter GDP report far missed the estimated 1.4 percent growth in a Reuters economist poll. On a quarterly basis, Japan's GDP fell 0.1 percent compared to an estimated 0.3 percent increase in Reuters polls.

Airlangga said the government had seen estimates of current global economic conditions from the predictions of institutions including from the World Bank and IMF. Therefore, the government will anticipate the impact of global weakening.

"So of course we anticipate it to protect our export commodities, guard the outside market, and then we also see that in the future we must open a new market," said Airlangga to the media crew, Friday, February 16, 2024.

Airlangga conveyed one of his steps, namely by membership in multilateral agencies, including OECD. This is expected to give Indonesia confidence to expand its economy.

"We are even reviewing opening the market with The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Some countries targeted by Canada and Latin America can be open," he said.

Airlangga conveyed the next step, namely by maintaining people's purchasing power.

"The consumption machine (RI) will continue to be maintained because that's what other countries don't have, so if other countries don't have it, we have that we have to strengthen it," he said.

According to Airlangga, the two consumption machines are important because Indonesia has a large population and is mostly the younger generation so that consumption machines must be driven by productivity.