It Is Believed That The World Economy Will Worsen, China's Slowdown Plays A Dominant Role

Illustration (Photo: Doc. Antara)

JAKARTA – Forecasts about the continued uncertainty of the world economy do not appear to be a figment. Most recently, the Minister of Finance (Menkeu) Sri Mulyani agreed with this.

In the presentation of the realization of the first semester of 2022 State Budget (APBN), the state treasurer explained that the global situation is currently facing a real slowdown in growth.

“We must continue to be vigilant because all indicators of the world economy have experienced a reversal, from recovery to weakening. At the same time, policy complexity can cause negative spillover effects, especially from the monetary side of developed countries," she said as quoted on Thursday, July 28.

The Minister of Finance himself highlighted the condition of the Chinese economy, which he considered to have the potential to trigger a global slowdown. This is because the panda country's productive activities are strongly connected to the supply chain network of various countries around the world.

"China's economy in the second quarter of this year was the weakest since the pandemic occurred or since the first quarter of 2020," she said.

Another analysis expressed by the Minister of Finance is related to China's policy to re-establish strict mobility restrictions (lockdown) in several regions.

“Another indication can be seen from the PMI (purchasing managers index) which is at level 52 after strengthening several times. Indonesia, Malaysia and Thailand are even at 50," she said.

For information, the IMF multilateral financial institution has revised the world economic growth in 2022 from the previous 3.6 percent to 3.2 percent. Likewise for the 2023 outlook, which was corrected to 2.9 percent from the initial 3.6 percent

“The economic slowdown due to the pandemic has been exacerbated by various increasingly escalative shocks. Then, the decline in growth occurred fundamentally and broadly, including in America and Europe," concluded the Minister of Finance Sri Mulyani.