We tackle inflation not only through high interest rates because we know that this inflation is not only from higher demand which comes from more liquidity
Jakarta (Armfalcon.com) – Minister of Finance Sri Mulyani stated that the world is not doing well three years after the COVID-19 pandemic.
“(Currently), the geopolitical situation creates a commodity crisis, namely rising energy and food prices, pushing up inflation, especially in the United States (US) and Europe, which for nearly a decade have enjoyed very low inflation and low interest,” said Minister of Finance at the Report Launching “Pathways Towards Economic Security: Indonesia Poverty Assessment at The Energy Building, Sudirman Central Business District (SCBD), Jakarta, Tuesday.
Due to these various problems, he continued, there was an increase in inflation in the US and Europe so that it had big implications for the whole world considering that the Central Bank (The Fed) was raising interest rates. With high interest rates, inflation is soaring killing the job.
Also read: Minister of Finance: There is no potential effect of default on US debt to the Indonesian economy
According to him, an increase in interest rates which are higher three years after the pandemic will greatly disrupt a lot of momentum, especially for various corporations and Small and Medium Enterprises (SMEs) considering that the SME sector is a social safety net (social safety net) for many poor families in Indonesia.
“They (corporations and SMEs) will be hit hard by this (various crises at the global level),” said the Minister of Finance.
To protect jobs and maintain Indonesia’s growth momentum, the government is said to be addressing rising inflation from the demand side (supply) because the current inflation is coming from distractions on the side supply.
“We overcome inflation not only through high interest rates because we know that this inflation is not only from higher demand which comes from more liquidity. Inflation comes from volatile foods as well as energy prices, so we’ll look at that and try to address it from the side supply because inflation comes from distractions on the side supply,” said the Minister of Finance.
Now, Indonesia is said to be able to reduce the rate of inflation even at a very critical time, namely when the homeland celebrates Ramadhan and Idul Fitri 2023/1444 Hijriah.
“That’s how we deal with this global shock, not only the pandemic that One Kahkonen mentioned (Country Director World Bank Indonesia), but now it is a much bigger complicated shock,” he said.
Also read: Minister of Finance projects economic growth to remain strong thanks to private consumption
Also read: Yellen: Pressure on US regional banks is still there, but the system is healthy
Reporter: M Baqir Idrus Alatas
Editor: Ahmad Wijaya
COPYRIGHT © BETWEEN 2023