JAKARTA Minister of Finance (Menkeu) Sri Mulyani said that almost all countries in the world agree that the economic turmoil throughout 2023 will be heavier than 2022.
According to him, this indication is reflected in the phenomenon of food prices and world energy which will most likely be difficult to decline in the near future.
"The momentum of the world economy is indeed moderated due to the very high increase in global inflation," he said through a virtual channel when attending the 100 CEO Forum at the Presidential Palace in Jakarta, Friday, December 2.
The Minister of Finance explained that the high inflation encouraged the central bank of many countries to carry out policies to tighten liquidity and raise benchmark interest rates.
"The central bank deliberately raises interest rates to hold back the demand side so that inflation does not run wild," he said
Furthermore, the state treasurer revealed that his party had received information from the US central bank (The Federal Reserve / The Fed), as the world's most influential monetary authority, that this condition would last the next half a year or possibly throughout 2023.
The high interest rate, according to some Fed officials, will last for a long time. This means that the economic impact on countries may be throughout 2023," he stressed.
The Minister of Finance added that high interest rate excesses are also certain to reach Indonesia and have some impact on the economy, such as capital outflows by non-resident (assing) investors which are currently still ongoing.
"This makes the government inevitably raise the yield of SBN. Meanwhile, Bank Indonesia is also forced to raise interest rates to prevent deeper outflows," he said.
To note, the deterioration in the economic situation next year has been predicted by many parties. One of the concerns is the multilateral financial institution International Monetary Fund (IMF) which states that the growth of GDP in the world in 2023 will only be 2.7 percent from the initial 2.9 percent.
This figure is lower than 2022, which is believed by the global economy to grow at the level of 3.2 percent.
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