President Joko Widodo (Jokowi) explained that the world's economic recovery in the midst of the Covid-19 pandemic has begun to be felt. This is evidenced by manufacturing activity which has begun to grow, exports and imports have sprung up, as well as rising commodity prices. "Signals of global economic recovery have been felt very well from global manufacturing activity which grew positively, exports and imports expanded to commodity prices which have increased," said Jokowi at the Indonesian Economic Bachelors Association (ISEI), Jakarta, Tuesday (31/8).
The global economic recovery is due to the synergy carried out by various parties. "We are grateful for the synergy of various parties for pain sharing, both fiscal and monetary policies as well as brake and gas policies between the economy and health," he explained. President Jokowi hopes that the national and global economy will continue to improve in the near future. Considering that a number of world economic institutions have also revised their growth projections in a positive direction. One of them is the International Monetary Fund (IMF). This world institution projects global economic growth of 6.0 percent and 4.9 percent for 2021 and 2022, respectively. "We hope that the national and global economy will continue to improve in the near future. Various projections from international institutions predict that the global economy this year and next year will improve," he explained.
Previously, the IMF announced global economic growth projections. The global economy is expected to grow 6 percent in 2021, and reduce to 4.4 percent in 2022. This projection changes drastically from the estimated -3.3 percent contraction in 2020 when the world is hit by the Covid-19 pandemic. "This reflects the additional fiscal support provided by the United States, the vaccination program that will strengthen the recovery period in this half year, as well as the continued resilience of economic activity to the pandemic in many parts of the world," said IMF chief economist Gita Gopinath, Wednesday (7/4/). 2021).
Gopinath stressed that high uncertainty also affected the IMF's projections because the pandemic outbreak had not been defeated, and positive cases were actually spreading faster in many countries. This makes the recovery process different in each country, as the economy relies on a slow vaccination process, more limited policy support, and hopes on a less successful tourism sector. "The biggest risk right now is still a pandemic. If there is a new virus variant that is not covered by the vaccine, it could cause a sharp decline. But on the other hand, if the vaccination program can be accelerated, it will improve the prospects," said Gopinath.
He also highlighted that the superfast recovery process could pose financial risks if the United States' interest rates rose significantly in an unexpected way. This could lead to an increase in asset valuations that fell in an irregular manner, very tight financial conditions, and worsening recovery prospects, particularly for highly leveraged emerging markets.
