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G20: A beacon of hope amid a global recession
The World Bank and the International Monetary Fund (IMF) estimate that as many as 31 countries are expected to come to the brink of recession next year.
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Meeting of minds: A man passes the headquarters of the International Monetary Fund in Washington DC, displaying a window decal for the IMF and World Bank Annual Meetings on Oct. 10, the first day of the event. (AFP/Getty Images/Drew Angerer)
The world is facing unrelenting problems. Still reeling from the crisis caused by the COVID-19 pandemic, the global economy is again faced with no less serious challenges -- the Russia-Ukraine war, which caused food and energy supply disruptions, and high inflation.
At the fourth high-level meeting of the Finance Ministers and Central Bank Governors of the Group of 20 (G20) members (4th FMCB) that was held on Oct. 12-13 in Washington DC, Finance Minister Sri Mulyani Indrawati described a world that is not doing well. The global economic situation is predicted to face even more challenging conditions ahead.
In fact, the IMF has forecast a potential global recession that countries need to be aware of. The signs can be seen in a skyrocketing inflation rate, weaker growth, increasing difficulty in obtaining energy and food commodities through trade between nations, climate threats and geopolitical conflicts.
The war between Russia and Ukraine has caused damage to food supply chains, especially wheat and energy, notably oil and natural gas. As a result, food, energy and fertilizer supplies have become uncertain, and their prices have increased. Oil-importing countries, especially developing economies, face the most severe threat.
But in the middle of these volatile global conditions, Indonesia remains resilient and relatively stable compared to many other countries that are facing challenging situations. We have been forced to readjust subsidy spending and take fiscal-policy measures to reduce inflationary pressure from the supply side. Fortunately, economic growth is still on target and already higher than last year or in 2020. Although inflation is rising, it is still within the target range of Bank Indonesia (BI). This strong state-budget performance has become a solid enough buffer to face the potentially stressful year of 2023 -- optimistic but cautious.
The World Bank and the International Monetary Fund (IMF) estimate that as many as 31 countries are expected to come to the brink of recession next year. The crisis has forced them to ask for monetary assistance from the IMF.
We must be prepared to face the difficult conditions which could worsen next year. The world, not limited to only the G20 member countries, must always be wary of the coming recession.
