Sri Mulyani Recalls Interest Rise Ends Recession, Signs Are Already There

Jakarta

Ministry of Finance Sri Mulyani Indrawati warned of the World Bank’s statement that a recession will occur in 2023. This may be real because central banks around the world are compact in aggressively raising interest rates.

“The World Bank has said that if central banks around the world raise interest rates extreme enough and together, then the world will definitely experience a recession in 2023 fast enough and extreme and it will certainly affect the economic growth of these country,” said Sri Lanka. Mulyani said during a virtual press conference on the state budget KiTa, Monday (26/9/2022).

The tightening of interest rates by developed countries to control inflation. This was followed by a downward correction in global economic growth projections.

Sri Mulyani said the weakening of the global economy had started to be seen from activity in the global manufacturing Purchasing Managers’ Index (PMI), which fell from 51.1 to 50.3 in August 2022.

Among the G20 and ASEAN-6 countries, only 24% whose manufacturing activity is still at the level of expansion and increasing compared to the previous month. These are Indonesia, Thailand, the Philippines, Russia, Vietnam and Saudi Arabia.

“Only 24% of G20 and ASEAN-6 countries, which means the majority is slowing down and contracting. Indonesia and the other five countries are still at an acceleration level. positive, but we are also very aware that our environment is weakening,” he said.

The only country that has seen an increase from the level of contraction to the level of expansion is France. The remaining 32% of countries experienced a slowdown and 40% of countries experienced a contraction.

“32% of countries such as the United States, Japan, India, Malaysia, Brazil, Australia, Singapore and South Africa experienced a slowdown or decreased condition compared to the previous month Even 40% of European countries, Germany, Italy, UK, China, South Korea, Canada, Mexico, Spain and Turkey now have PMIs at contraction levels “, he added. Sri Mulyani.

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