Finance Minister Sri Mulyani Indrawati presents the government’s macroeconomic projection and draft fiscal policy (KEM-PPKF) of the 2023 state budget in a plenary session at Gedung Nusantara II, Jakarta, on Friday (20/5/2022). Photo: Jaka/Man 

Finance Minister Sri Mulyani Indrawati praised House’s collaboration with the government and other agencies for successfully dealing with the formidable pandemic, saying global risk change should be the primary focus that has to be taken into consideration in a proper, careful, timely, and effective manner.

She spoke in a House plenary session to present the macroeconomic projection and draft fiscal policy (KEM-PPKF) of the 2023 state budget in a plenary session at Gedung Nusantara II, Jakarta, on Friday (20/5/2022).

“We have been left with policy choices that are very sensitive and not easy,” she said. “However, thanks to collaboration and success achieved by central and regional governments, legislative institutions (MPR, DPR, and DPD, judiciary institutions, other institutions, communities, academics, and business entities) in battling such a difficult pandemic, we hope and at the same time believe that Indonesia will be able to face these new, different, and very complex challenges.”

However, amid the current post-pandemic situation, Indonesia has seen a promising national economic recovery, but that should not make the country complacent, she added. New challenges and risks emerging from complex and dynamic global factors such as geopolitics, economy, and finance must be anticipated and addressed swiftly. “In the World Economic Outlook issued in April, IMF projected the sluggish global economic growth in 2022 at 3.6 percent, or significantly contracted by 0.8 percentage points, lower than in January 2022’s forecast,” she added. 

She went on to say that, besides the Covid-19 pandemic, which is not entirely over, two significant challenges need to be anticipated, which are global inflation, mainly due to the Russia-Ukraine war, and the acceleration of global monetary tightening, especially in the US. “The Russia-Ukraine war has caused massive disruption to production/supply side, resulting in an extreme increase in global commodity prices. Crude oil prices constantly hit $100 a barrel,” she said.

Said Abdullah, Chairperson of the House Budget Committee, previously said despite the economic recovery after the pandemic, there is still a pressure on the economy that is caused by the Russia-Ukraine war. The Indonesian Democratic Party of Struggle (PDI-P) politician said the war might cause major global commodity prices, such as crude oil, to decline as the demand slows.

“As most countries have unleashed fiscal and monetary stimulus, the economic recovery is now underway,” said Abdullah in the Budget Committee’s meeting with the Finance Minister on approval of an additional budget in response to a surge in commodity prices at Gedung Nusantara II, Jakarta, Thursday (19/5/2022). “The economic recovery is taking place in our country as it has managed to deal with the Covid-19 pandemic and roll out various economic recovery programs. The economic growth has returned to pre-pandemic levels.” (rdn/sf-mut)