Indonesia’s Finance Minister Sri Mulyani Indrawati told the Mandiri Investment Forum 2023 on Wednesday that a decline in inflation, a stable and cheaper price trend, and improved recovery are expected in the second half of 2023, according to Tempo and Antara News.
“This sparks new hope that in 2023, at least in the second half, we will see a much more positive combination of reduced inflation and better recovery,” the minister said.
This would be the result of easing of pressure factors stemming from policy response, such as monetary restrictions and a decline in the ever-growing interest rate imposed by monetary authorities, say Tempo.
Some countries have now released economic growth data for 2022, which has reflected a better performance than projected, she added. For example, some countries that were predicted to experience contraction were able to record positive growth, reaching zero percent.
There were also some countries that were projected to grow at zero percent, but managed a growth of 0.25-percent.
This growth is good news, however, the overall performance confirms the global economic slowdown. It may not be as severe as it was, but it is still there and will persist all the way until the first quarter of 2023, or possibly longer into the first half of the year.
Minister Indrawati saw this as a good thing, one that instils optimism about short-term economic growth and a decline in the pressure on prices.
“That is something that is very great, as in, the dilemma for many policy makers will be eased much more,” she said.
According to Indrawati, the most difficult situation is when policy makers have to pick between stabilizing prices, including the exchange rate, or maintaining growth, say Tempo.
Of course, no policy maker, no matter from which country, can choose between the two, and tends to want both. The good news is that currently, the situation has become slightly better.
She expected this condition to last longer though it cannot be denied that the growth would be lower compared to the previous year. Many projections made by international agencies have noted the weakening of growth in 2022 and projected the same for 2023, with growth slowing further compared to 2022.
Source: Antara New, Tempo