Japan And England Recession, Monitoring Government Impacts On Indonesia

Rupiah (Photo: Antara)

JAKARTA - The government monitors a number of developed countries that are currently experiencing a contraction in economic growth, namely Japan and the UK, mainly due to high inflation rates and weakening domestic demand.

The contracted economic growth in two consecutive quarters signals that Japan and Britain will enter a technical recession, though it is still too early to judge that the two countries will enter a state of economic recession.

According to the National Bureau of Economic Research (NBER), the recession itself broadly can be interpreted as a significant decline in economic activity spread across the economy, lasting more than a few months, and usually seen in real GDP, real income, employment, industrial production, and wholesale sales.

"Observing these conditions, the government continues to monitor the impact of the transmission of the global economic slowdown on the national economy, especially Japan," said Secretary of the Coordinating Ministry for Economic Affairs, Susiwijono Moegiarso, quoted in his official statement, Monday, February 19.

Susiwijono said Indonesia has good cooperation relations with Japan, such as in terms of investment and export-imports. Meanwhile, Japan is one of the main export destinations for Indonesia with the main commodities for coal exports, electronic, nickel and automotive components.

It was noted that Indonesia's exports to Japan throughout 2023 were ranked 4th with a total of 18.8 billion US dollars, while Japan's Foreign Direct Investment (FDI) to Indonesia in 2023 was also ranked 4th with a total of 4.63 billion US dollars.

Although until now the national economy is still showing resilience with solid growth achievements supported by domestic demand that continues to grow and is maintained by controlled inflation, the Government continues to take a number of anticipatory steps against the global economic risk to keep the Indonesian economy stable.

Susiwijono conveyed that in order to maintain the resilience of the external sector, namely the trade balance, the Government has issued a Decree of the Coordinating Minister for Economic Affairs Number 416 of 2023 concerning the Implementing Team and the Working Group of the National Export Improvement Task Force as a follow-up to Presidential Regulation Number 24 of 2023 concerning the National Export Improvement Task Force.

Coordinating Minister for Economic Affairs Airlangga Hartarto acts as Head of the Steering Team and consists of related Ministers and business actors.

"The task force will strive to improve national export performance in order to strengthen the trade balance and encourage economic growth, both through strengthening export supply, diversifying export markets, strengthening financing and international cooperation, and developing MSME exports," he said.

In addition, efforts to explore in order to open new markets for export development are also continuously being carried out by the Government.