The uncertain world situation has caused several countries to be dragged into a recession in 2023. Minister of Finance, Sri Mulyani Indrawati, said that developed countries will also experience this dire situation, not only developing and poor countries.
This was conveyed by Sri Mulyani in a press conference after the meeting of the Ministers of Finance and Central Bank Governors of G20 member countries in Washington DC, United States (US), Friday (10/14/2022).
“This is not only for low-income countries, but for middle-income countries, and even developed countries,” she explained.
The main cause of this dangerous situation is the Covid-19 pandemic which is not yet fully over. Furthermore, it was exacerbated by the war between Russia and Ukraine as the root cause of the food and energy crisis, causing a spike in inflation everywhere.
The situation is getting more complicated when developed countries change the direction of monetary policy. Such as the United States (US) which aggressively raised its benchmark interest rate and caused major turmoil in financial markets.
“So the war, commodity prices, and creating an increase in global inflation, followed by an increase in interest rates and tightening liquidity, are clearly a big risk for a country that is already experiencing debt pressure,” said Sri Mulyani.
Several large countries such as the US, France, Canada, Britain, Germany, Japan, Russia, Italy, Germany, Ukraine, and many others countries are predicted by the IMF to experience a recession in 2022-2023.
“The global economic situation is becoming more and more challenging. I don’t know, it’s an exaggeration to say that the world is in a dangerous condition,” said Sri Mulyani.
Indeed, Based on the forecasts of the International Monetary Fund (IMF), this difficult situation will continue until 2023.
“This complex global economic challenge requires strong leadership and collective action from the G20,” She said.