The Government of Indonesia has carried out detailed calculations in an effort to anticipate the risk of a global economic recession. This is also being done by continuing to prepare for the democratic party for the upcoming 2024 Election very carefully and from a long time ago.
Entering 2023, many predict that the world economy will soon face the threat of a recession, namely when economic growth is negative for two quarters or even more in one year. Based on a survey conducted by Bloomberg, there are at least 6 (six) countries that are quite close to the brink of recession.
How could it not be, because the six countries in the Bloomberg survey were even predicted to have the possibility or probability of experiencing a recession above the 20 percent rate, namely Sri Lanka, which is predicted to have a recession of up to 85 percent, the European Union will experience a recession with a prediction of 50 percent, the United States with the figure is 40 percent, New Zealand is at 33 percent, and Japan and South Korea each have a recession probability of up to 25 percent.
Meanwhile, the probability or possible threat of recession risk that Indonesia has in 2023 can be said to be very small, namely at only 3 (three) percent. This is of course thanks to good calculations and also all the preparations and anticipatory efforts that have been made by the Government of the Republic of Indonesia (RI).
The strength possessed by Indonesia in facing the threat of global economic recession cannot be denied comes from how resilient the domestic economy is, which has an economic growth rate that continues to grow even above 5 (five) percent even though there are many issues related to global uncertainty. Also included, Indonesia has good inflation control and is also able to continue to maintain the rupiah exchange rate.
When viewed from the external side, the trade balance and also transactions in Indonesia continue to run consistently, recording a surplus with the addition of the Republic of Indonesia’s foreign exchange reserves which also remain high. Even though the possibility of a recession can be said to be very small for Indonesia, the condition of other countries in the world that have the potential to enter into a recession is of course undeniable that it will more or less influence the domestic economy.
With all the possibilities that could happen, the Minister of Finance of the Republic of Indonesia (Menkeu RI), Sri Mulyani Indrawati stated that Indonesia is still able to face the economic challenges in 2023 with optimism but maintain vigilance. The government itself continues to be optimistic that the economy in the country will be able to move faster in 2023, as is the ability of the Indonesian economy to deal with pandemics and turbulence in 2022 yesterday.
In his press statement regarding the Plenary Cabinet Meeting, the Indonesian Minister of Finance explained that Indonesia continues to be optimistic because it reflects on the extraordinary achievements when facing all challenges in 2022. However, even though they have optimism, it does not mean that the government is not vigilant.
According to him, vigilance must continue because in 20233, one third of the world will experience a recession or around 43 percent of countries will experience a recession as projected by the International Monetary Fund (IMF). Therefore, all parties must maintain the momentum of national economic recovery.
Optimism regarding economic recovery is also continuously supported by the architecture of the 2022 State Budget which has indeed been prepared as a driving force for recovery, which among other things is by planning state spending which is expected to be able to protect Indonesia from global economic shocks.
The APBN in 2023 is also planned to be spent for the purposes of staging the holding of General Elections (Elections) in the upcoming 2024, which is budgeted at IDR 21.86 trillion.
Sri Mulyani then added that the spending budget is important in 2023 because it is able to protect the Indonesian economy from the threat of various shocks that are happening in the world, whether due to rising prices, inflation or economic slowdown from other countries.
Meanwhile, Observer of Constitutional Law from Trisakti University, Radian Syam said that no matter how tough the conditions are in 2023, Indonesia must continue to hold elections. According to him, elections are a constitutional matter for the Indonesian people which are clearly regulated in Article 1 paragraph 2 and Article 22E of the 1945 Constitution of the Republic of Indonesia. So that this recession has been taken into account by the government and the 2024 elections have been prepared very carefully long ago.
Preparation for the 2024 Election is indeed a very important thing for the Government to do, because if the preparations are not mature enough, it will backfire because 2023 will be full of conditions of uncertainty. Therefore, the Government of Indonesia itself has also taken into account how to anticipate the recession this year. (Farrel Haroon Jabar, Contributor to Nusantara Reading Room)