Jakarta –
Bank Indonesia (BI) stated that the world is currently experiencing crisis critical. The ongoing COVID-19 pandemic plus the war between Russia and Ukraine has made economic pressures even higher, causing global commodity prices to rise sharply.
BI Senior Deputy Governor Destry Damayanti said global commodity prices including fuel and food could be even higher. This could trigger inflationary pressures globally.
“Currently we are experiencing a very severe crisis. This exacerbates disruptions in the world trade chain and increases uncertainty in global financial markets,” said Destry at the G20 side event entitled ‘Strengthening Economic Recovery Amidst Heightened Uncertainty’, Friday (22/22/2020). 4/2022).
One of the challenges stems from the normalization of monetary policy by the Fed and several other central banks which have raised their benchmark interest rates in response to inflationary pressures. This is the impact of Russia’s invasion of Ukraine to sanctions from western countries.
Increased uncertainty in global financial markets will result in limited capital flows to emerging market countries along with the increased risk of capital reverse to safe haven assets. This has the potential to put more pressure on developing countries, including Indonesia.
“But we are very lucky, if we look at the direct impact of Russia and Ukraine on Indonesia, it is actually limited. Even to a certain extent Indonesia benefits,” he continued.
The advantage in question is that the export performance managed to penetrate the highest record in history. The export value in March 2022 was recorded at US$ 26.50 billion, an increase of 29.42% (mtm) and 44.36% (yoy). At the same time, the import value in March 2022 reached US$ 21.97 billion with a growth of 32.02% (mtm) or 30.85% (yoy).
“We can see that an overall recovery on the expenditure side as well as on the production side, even at the regional level is taking place,” he added.
Apart from that, the Russian-Ukrainian conflict must be kept in mind so that it doesn’t last too long.
“If Russia’s conflict with Ukraine is prolonged, I think we should also be very concerned especially with normalization in the US. It certainly provides some complex talent for our economy, especially for us as regulators and as macroeconomic policymakers,” concluded Destry.
(aid/dna)
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