Heaptalk, Jakarta — Indonesia’s Minister of Finance, Sri Mulyani, held a bilateral meeting with the International Finance Corporation (IFC) Managing Director, Makhtar Diop, to discuss several important global and domestic economic issues.
According to her, both parties approved that global economic challenges continue to change and are characterized by various uncertainties, specifically amid a general election year in which more than 70 countries hold their democratic parties.
“Regarding domestic conditions, we agree that Indonesia’s fiscal condition is still solid. State revenues continue to grow, and expenditures are managed prudently. Moreover, with a trade balance surplus for 46 consecutive months, the conditions of the global economic slowdown were challenging,” Minister Sri conveyed.
To maintain economic stability, the Ministry of Finance has also prepared various strategies to prevent the weakening of the rupiah exchange rate due to the Iran-Israel conflict and the Fed’s central bank interest rate policy.
She will also ensure that her party maintains macroeconomic stability from the monetary and fiscal sides. For this reason, strategic coordination with Bank Indonesia will continue to be carried out to adjust to existing pressures. In a fluctuating global situation, the government also ensures that the State Revenue and Expenditure Budget (APBN) functions as an effective shock absorber, which is expected to reduce the negative impact of rupiah exchange rate fluctuations on the domestic economy.
From the export side, revenues will be better with the rising dollar exchange rate regardless of the current global situation. However, from the import side, price conversion to the rupiah will be higher, impacting inflation in Indonesia. Despite the ongoing global turmoil, Minister Sri Mulyani expressed her confidence in Indonesia’s economic resilience, perceiving the government’s successful handling of the COVID-19 pandemic crisis and its strategic efforts.
“During global interest rates and inflation, I am confident that our country’s economy will remain on target, with contributions from the export side and a surplus trade balance,” Sri said in her statement, cited in Katadata.
IFC is an extension of the World Bank in helping fight extreme poverty in developing countries, including Indonesia, through collaboration with the private sector. Minister Sri revealed that the value of IFC’s investment in Indonesia had reached US$9.6 billion, or around Rp155.6 trillion. She claimed that this global financial institution will continue to broaden its operation in the country to combat existing economic challenges.
