JAKARTA (TheInsiderStories) – Bank Indonesia (BI) is preparing various strategies to get out of the adverse effects of the unconducive global economy conditions, said the governor on Tuesday (10/29). With this strategy, its expected could drive the economic growth and reached this year’ target 5.1 percent.
The governor Perry Warjiyo asserted, countries in the world are currently facing various challenges due to the global economic situation. The continuing trade war between the United States (US) and China, the increased risk of Brexit and other geopolitical risks causes the global economic growth slow.
“If the trade war continues, then world economic growth can be below 3.1 percent or even lower, 2.9 percent,” he said in one seminar in Jakarta, today.
Warjiyo really hope US and China reached a trade deal. Because if there is no an agreement, he rated, the tension will continues and give more impact to the global economy and the commodity prices.
As reported, many countries are currently implementing dovish policies, or low interest rates and continuing to add liquidity to boost their economy. These causes a high risk premium and bring the volatility on the foreign capital flows and the exchange rate.
In reducing the adverse effects of the technology, said Warjiyo, BI would accelerates financial inclusion with the digital economy, but accompanied by increased risk management such as increasing consumer protection, anti-money laundering and cyber risk.
In facing these challenges, Warjiyo explained, the central bank will implement the policy mix, between monetary and macro-prudential, through lower interest rates and property relaxation. BI also encourages the digital payment service programs in 2020.
He also proposed to the government to find new sources of economic growth in the tourism, medium and small medium enterprises, digital finance, maritime, and manufacturing sectors, which include automotive, textiles, and electronics. The next focus of BI, he adds, is to carry out economic transformation through cutting investment permits, specifically for new sources of growth.
Beside, said the governor, the country need to established bilateral or regional cooperation to drive the export, investment by looking for new markets, especially in Africa. He believed, the steps will be able to strengthen the source of growth from abroad. Finally, strengthening regional resilience in Asia.
With these various strategies, coupled with low inflation trends, a stable exchange rate, and current account deficit, the Indonesian economy can grow 5.05 percent by the end of this year. While, next year it can approach 5.3 percent with various policy synergies, concluded by the governor.
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