By: Maskawi Syaifuddin *)
The current global economic slowdown is a concern for many countries, including Indonesia. The uncertainty caused by geopolitical dynamics, commodity price fluctuations, and monetary policies of developed countries has triggered a slowdown in economic activity in various sectors. This condition has a direct impact on the business world, investment, and people’s purchasing power. In a situation like this, measured mitigation steps are needed so that the impact does not spread further. The Indonesian government, through various fiscal and monetary policies, continues to strive to respond to these challenges by prioritizing economic stability and protection for vulnerable groups.
Recession mitigation itself is a measure designed to reduce the negative impact of an economic slowdown. When business activity slows down, purchasing power decreases, and unemployment increases, a fast and measured strategy is needed so that the economy does not fall deeper. In this context, the government does not just watch the global economic turmoil, but moves with a balanced approach: maintaining macro stability while protecting vulnerable groups.
One of the real steps that has been taken is to maintain people’s purchasing power by strengthening fiscal stimulus. Government spending is increased in a targeted manner, including in the form of providing holiday allowances, social assistance, and subsidies that directly touch the basic needs of the community. This step has proven to be able to maintain household consumption as the main driver of national economic growth.
In addition, the government is also working on financial sector stability. The Financial System Stability Committee (KSSK) emphasized that Indonesia has relatively strong economic fundamentals to face global uncertainty. The Ministry of Finance together with Bank Indonesia and related authorities continue to monitor developments in the situation, including the dynamics of the rupiah exchange rate and stock price index, by prioritizing cross-sector coordination. Minister of Finance, Sri Mulyani stated that the government will continue to increase vigilance and take preventive measures so that external impacts do not damage the foundation of the national economy too much.
Another important step is the sustainability of national strategic projects. In times of uncertainty, the government did not hold back the pace of development. In fact, infrastructure projects continued to be carried out, as an effort to create a multiplier effect on labor absorption and investment. Construction sector activities, both by the government and the private sector, also boosted business confidence and maintained growth momentum.
Fiscal and monetary policies are also managed carefully. The government together with Bank Indonesia continue to strive to create a policy space that is adaptive to global turmoil. Interest rates, exchange rate stability, and fiscal incentives are combined to create conducive domestic economic conditions. In addition, stimulus for MSMEs remains a major concern so that this sector can survive and even grow in difficult situations.
Efforts to maintain the stability of the rupiah are one of the main focuses. The weakening exchange rate cannot be separated from external pressures such as interest rate policies in developed countries, especially the United States. However, the government is not sitting idly by. Concrete steps such as strengthening foreign exchange reserves, expanding export markets to the ASEAN, BRICS, and European regions, and intensifying trade negotiations, are being carried out simultaneously to maintain the balance of the current account balance.
In terms of investment, the government continues to create a friendly and attractive climate. Although the global situation is pressuring the stock market and other assets, Indonesia continues to record growing investment activity, especially in the non-building and capital goods sectors. This shows that investors still have confidence in Indonesia’s economic prospects in the medium and long term.
It should also be noted that recession mitigation is not enough at the macro policy level. The government invites all levels of society to participate in the economic recovery process. Individuals and households are encouraged to strengthen financial resilience, improve financial literacy, and develop skills relevant to the needs of the labor market. In this context, the state is present as a facilitator that provides educational support, training, and access to technology and capital.
Positive responses also came from the legislative body. The Chairperson of the Indonesian House of Representatives, Puan Maharani, said that her party fully supports the government’s steps in maintaining national economic stability. The DPR is even ready to cooperate through its supervisory and legislative functions so that government policies can be implemented optimally and side with the people. This harmony between the executive and legislative is a strength in itself in facing existing challenges.
In responding to the uncertain situation, the Indonesian government chose to act quickly, precisely, and inclusively. Mitigation steps were taken not only to save the statistics, but more importantly, to ensure the sustainability of people’s welfare. Recession is not the end of everything, and with joint work and strong commitment, Indonesia is believed to be able to not only get through this difficult time, but also come out stronger and more resilient in the future.
When global economic pressure hits various countries, including Indonesia, the difference lies in the readiness to face and overcome it. Mitigation of economic weakness is not just a policy, but a reflection of the state’s concern for economic stability and public welfare. In the stormy currents of the world economy, the government continues to be a captain who is alert in directing the nation’s ship so that it continues to sail calmly and safely to its destination.
*) Economic observer from the Pancasila Madani Institute
