The Government Ensures That The Stability Of The Financial System Is Maintained And Empowered To Hold Good

Illustration (Photo: Doc. Ministry of Finance)

JAKARTA - The government through the Minister of Finance (Menkeu) Sri Mulyani said that the stability of the financial system in Indonesia in the third quarter of 2022 remained in a well-maintained and resilient condition (resilient).

It was stated that his party together with the Governor of Bank Indonesia (BI) Perry Warjiyo, Chairman of the Board of Commissioners of the Financial Services Authority (OJK) Mahendra Siregar, and Chairman of the Deposit Insurance Corporation (LPS) Purbaya Yudhi Sadive are committed to continuing to maintain financial system stability by strengthening coordination and continuing to be aware of developments from global risks. "The performance of the global economy seems to slow down with the risk of increasingly high uncertainty. The slowdown in economic growth occurs in a number of developed countries, especially the United States (US), Europe, and China," he said as quoted from the official website on Friday, November 4.

According to the Minister of Finance, this assumption can be seen from the global Manufacturing Purchasing Managers' (PMI) in September 2022 which entered the contraction zone at the level of 49.8.

The state treasurer explained geopolitical tensions that triggered high inflationary pressures, global economic fragmentation, trade and investment, as well as the impact of tightening monetary policy that was more aggressive than monetary authority in developed countries.

"Even so, the improvement in Indonesia's domestic economy is still continuing. This is supported by the aggregate demand, namely in the form of private consumption which is still strong amid rising inflation, increased non-construction investment, and maintained export performance," he said.

The Minister of Finance added that in October 2022, Indonesia's Manufacturing PMI was still included in the expansion zone at the level of 51.8 in September 2022, the Real Sales Index (IPR) grew 5.5 percent year on year (yoy). Meanwhile, the Consumer Confidence Index (IKK) also still shows an expansive consumer perception, namely at the level of 117.2.

"The improvement in the national economy is also seen in the performance of major business fields, namely the trade, mining, and agriculture sectors. Thus, we see that in terms of demand, consumers are still quite strong, exports are still good, and in terms of supply, main business fields such as trade, mining, and agriculture also show good performance," said the Minister of Finance.

Meanwhile, in terms of inflation, it was observed that it was lower than expected. Inflation of the October 2022 consumer price index (CPI) was recorded at the level of 5.71 percent yoy or lower than the previous month which was recorded at 5.95 percent. This is especially when the government is making adjustments to fuel oil prices (BBM).

"Obviously it is a good development, namely Indonesia is still able to maintain relative inflation at a moderate level. Inflation from volatile food has decreased to 7.19 percent. This is in line with the synergy and coordination steps implemented by the government, both the central government and local governments, together with Bank Indonesia," closed the Minister of Finance Sri Mulyani.