Jakarta, CNBC Indonesia – Bank Indonesia (BI) Deputy Governor Dody Budi Waluyo has just represented Indonesia at the International Monetary Fund (IMF) and World Bank Annual Meetings series on October 13, 2021 in Washington DC, United States (US).
Various countries conveyed the current state of the energy crisis they were experiencing. The main reason is the weather. So this problem is expected to be temporary and will be completed in the near future.
“This is just a matter of weather, so that the hydro power plant will be disrupted,” explained Dody at a press conference, Tuesday (19/10/2021).
As is known, the current energy crisis is hitting a number of countries. Both in Europe, China, and India. The majority of countries that are currently experiencing an energy crisis are experiencing an electricity crisis, as a result of soaring world natural gas prices and other factors in recent times.
In China, the ongoing power supply crisis is triggering blackouts for households and forcing factories to cut production. This condition threatens to slow down the economic activities of the giant Bamboo Curtain country and put pressure on global supply chains.
In addition, said Dody, related to high inflation in the United States (US), all agreed that this condition was only temporary. But it is likely to last until mid-2022.
Inflation in the US is known to be a concern again. Because the current high inflation is predicted to last a long time, not just temporarily. Therefore, the US central bank (The Fed) may be forced to raise interest rates, so that inflation does not get out of control.
The impact can be large, because the pace of economic growth can be hampered, especially if the labor market begins to weaken again. US bond yields (Treasury) also moved volatile yesterday. The 10-year tenor treasury briefly shot up 1.6%, but after that it turned down and ended trading at 1.5525%, or down 2.9 basis points from the previous day’s close.
“This supply and demand mismatch or shortage could last more than 2021. However, the pressure will not lead to permanent or sustainable inflation,” he said.
“It only provides a kind of understanding that for 2022, inflation will fall again until mid-2022. Imported inflation into Indonesia is also relatively small, there has not been a strong impact, for example from the rupiah exchange rate, rising global commodity prices to the consumer price index in Indonesia,” he said. Dody continued.
The next agreement from the IMF-WB Group annual meeting also agreed that the distribution of vaccinations is not only a big issue of herd immunity, but an even distribution will be carried out.
This, said Dody, is a joint commitment or joint action of the G20 countries to overcome the problem of lack of vaccination, especially developing countries or emerging markets. “Vaccination helps investment recover in several countries,” he said.
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