President Jokowi Warns of Global Economic Turbulence

President Jokowi delivers his Address on the Presentation of the Government Statement on the Bill on the State Budget for the 2023 Fiscal Year and Its Financial Note before the Plenary Session of the House of Representatives (DPR) in Jakarta, Tuesday (08/16).

President Joko “Jokowi” Widodo has called on all parties to stay vigilant because the risk from global economic turbulence remains high.

The President delivered the statement in his Address on the Presentation of the Government Statement on the Bill on the State Budget for the 2023 Fiscal Year and Its Financial Note before the Plenary Session of the House of Representatives (DPR) in Jakarta, Tuesday (08/16).

The President also said that the global economic slowdown has the potential to affect the pace of domestic economic growth in the short term. Meanwhile, geopolitical conflicts and the war in Ukraine have led to an escalation of supply side disruptions that have triggered spikes in global commodity prices and pushed up inflation rates in many countries, including Indonesia.

“Central Banks in many economies are aggressively tightening monetary policies. The tightening has given rise to turbulence in financial markets in many developing economies. As a repercussion, exchange rate of most developing economies has weakened,” the President stated.

With all those pressures, the President added, the IMF projected that the global economic growth markedly slows down from 6.1 percent in 2021 into just 3.2 percent in 2022 and 2.9 percent in 2023.

“In the last eight years, we have made every effort to create a more favorable development ecosystem. Development of massive infrastructure, improvement of human capital, as well as simplification of business and investment regulations are key measures to strengthen the foundation of the national economy in surmounting future economic challenges,” the President said.

The President went on to say that the Government continues to expedite structural transformation to build a more solid and sustainable economic development machine. In addition, industrial downstreaming to boost economic value continues to be strengthened, and the green economy continues to be encouraged.

“The use of domestic products must be a priority to reduce dependence on imports. We must also facilitate digital economy so that MSMEs can level up and generate new world-class decacorns in the future,” he said.

The President further said the balance of macro-fiscal policies must be maintained.

“Fiscal consolidation is of utmost importance. The prudence of the State Budget is improved in order to be adaptive and responsive in the medium and the long term,” the President remarked. (DND/FID/MAY/UN) (RI/MMB)