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Sri Mulyani: Indonesia’s economy is facing four hurdles

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The economy in April 2022 faced the challenge of rising prices. (IO/Rayi Gigih)

She added that the economic challenges in April shifted from the Covid-19 pandemic to soaring prices caused by supply disruptions and geopolitical tension. “This extreme price increase leads to a tightening of the monetary sector which causes interest rates to rise and liquidity becomes tight,” she explained. 

She said there are four challenges that the Indonesian economy is facing, namely high inflation, rising interest rates, tightening liquidity, and global economic slowdown. “These are the risks that must become the center of our attention for this year and next year,” she pointed out. 

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Therefore, APBN remains the key instrument in protecting the economy and the people. She believes that APBN consolidation is a necessity in order to maintain a healthy and sustainable budget. “Faced with these complex circumstances, the budget must be strong and be nurtured back to health immediately,” she said. 

Sri Mulyani went on to explain the government’s three priorities this year. First, maintaining the economic recovery momentum. Second, maintain people’s purchasing power. And third, maintaining the health and sustainability of the state budget. “Thus, we will continue to work closely with all ministries, agencies and also with the House so that APBN can be maintained properly to support economic recovery, maintain people’s purchasing power, and maintain the health of the Budget itself,” she said. 

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