Global Economic Growth Slows, Sri Mulyani Reveals There Is A Shift In Capital Flow

Finance Minister Sri Mulyani at the Presidential Palace complex, Jakarta, (Photo: ANTARA)

JAKARTA - Finance Minister Sri Mulyani Indrawati revealed that there has been a shift in capital flow from the United States to emerging market countries.

According to him, this shift encourages the weakening of the US dollar, as well as strengthening several other countries' currencies.

He said, along with the increasing global uncertainty and turmoil in the trade sector and capital market, the World Bank in its report in June 2025 projected global economic growth of 2.9 percent based on purchasing power parity (PPP). This figure has decreased from the previous projection of 3.2 percent.

"To provide an overview of uncertainty has lowered or revised the decline in global economic growth as stated by the world bank from 3.2 percent to 2.9 percent," he said at the 2025 KSSK Periodic Meeting Results Press Conference, Monday, July 28.

In addition, he said, the Organization for Economic Co-operation and Development (OECD) also provided a similar view, revising the decline in the projection of global economic growth in 2025 from 3.1 percent to 2.9 percent.

"This is the environment we observe and we are aware of. KSSK is optimistic that Indonesia's economic growth in the second quarter will be maintained," he said.

Sri Mulyani said that she was optimistic that it was supported by consumption and purchasing power of people who were still growing positively, as well as the strong resilience of business activities supported by the role of the State Revenue and Expenditure Budget (APBN) in carrying out counter-cyclical functions and increasing the effectiveness of market distribution.

Pemerintah juga telah meluncurkan berbagai stimulus ekonomi pada kuartal I dan II dalam mendukung pertumbuhan ekonomi.

"Stimulus ekonomi telah diluncurkan oleh pemerintah pada kuartal satu maupun kuartal dua serta dorongan dari program-program strategis pemerintah yang mulai berjalan. Juga dukungan terhadap sektor-sektor prioritas yang memberikan dukungan terhadap bertahannya pertumbuhan ekonomi Indonesia," jelasnya.

Di sisi lain, ia menyampaikan Pemerintah terus memberikan perlindungan sosial bagi masyarakat yang paling rentan, serta bantuan untuk sektor-sektor yang terdampak langsung oleh situasi global yang penuh ketidakpastian.

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The government has also launched various economic stimuli in the first and second quarters in supporting economic growth.

"The government has launched economic stimulus in the first and second quarters as well as encouragement from the government's strategic programs that are starting to run. Also support for priority sectors that provide support for the sustainability of Indonesia's economic growth," he explained.

On the other hand, he said the Government continues to provide social protection for the most vulnerable people, as well as assistance for sectors directly affected by the global situation full of uncertainty.