Jakarta, CNBC Indonesia – Minister of Finance Sri Mulyani Indrawati expressed concern about global conditions, as feared by President Joko Widodo (Jokowi). Especially the policies of developed countries that are able to restrain the ongoing economic recovery of the country.
“When we focus on restoring the economy and improving the state budget, the global environment is not static, risks arise in new forms,” he said in the Kick Off Socialization of the Law on Harmonization of Tax Regulations, Friday (11/19/2021).
Economic growth in the third quarter of 2021 reached 3.51% (year on year/yoy), slower than the second quarter of 2021 which reached 7.07%. The whole year is estimated to reach 4%.
The United States (US) is one of Sri Mulyani’s concerns. US inflation, which has now reached 6% or the highest in history, could force the US Federal Reserve (the Fed) to change monetary policy, known as tapering.
“They will be forced to apply the brakes. If the US brakes, the whole world will be shaken,” he explained.
It was clear that Sri Mulyani was very worried, because this was not the first time this had happened. The same story happened in 2013, when the domestic financial market was ravaged by this policy or known as a taper tantrum. Although Bank Indonesia (BI) believes the impact this time will not be as severe as before.
“This will have an impact on monetary tightening in the years to come, we must be aware of this,” said Sri Mulyani.
Europe also poses a threat. Especially Germany, where the inflation rate has also soared, due to rising international commodity prices and supply chain disruptions.
Not forgetting China as well. The state led by Xi Jinping is being hit by supply chain disruptions due to the new wave of covid-19.
“So we will be wary of this environment until the end of the year until next year when we take care of the economy and make the state budget healthy,” he explained.
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