BI Believes Global Economic Growth Is Better Even Though Silicon Valley Bank Experiences Bankruptcy

JAKARTA - Governor of Bank Indonesia (BI) Perry Warjiyo firmly stated that his party believes that global economic growth will be better than the previous projection.

According to him, the central bank estimates that global economic growth in 2023 could reach 2.6 percent.

"This is in line with the positive impact of China's economic opening and the decline in global supply disruption," he said during a press conference in Jakarta on Thursday, March 16.

Perry explained that this assumption was also supported by the economic growth of the United States (US) and Europe better than the previous projections and followed by the declining risk of recession.

It was stated that the improvement in global economic prospects was estimated to increase non-energy commodity prices amid declining oil prices due to reduced supply disruptions.

"The positive development of the global economy and expectations of wage increases due to the tightness of the labor market in the US and Europe have resulted in the process of decreasing global inflation running slower, thus encouraging the strict monetary policy of developed countries to last longer throughout 2023," he said.

Perry added that the tightening of monetary policy in question, plus the emergence of cases of closing three banks in the US, increased global financial market uncertainty which then restrained capital flows to developing countries and increased exchange rate pressures in various countries.

"Bank Indonesia continues to strengthen the policy of stabilizing the rupiah exchange rate in order to mitigate the uncertainty of the global financial market, including the impact of the bank closure in the US on the domestic financial market and the exchange rate," he stressed.

Perry himself believes that Indonesia's economic growth will be biased upwards in the range of 4.5 percent to 5.3 percent this year.