Jakarta: President Joko "Jokowi" Widodo said that the global economy could experience recession in the near future. He added that the looming recession would affect the country's industrial growth.
The former Jakarta government asked his cabinet and government officials to stay vigilant. He explained that the global economy is influenced by a number of factors, including ongoing trade war between the US and China.
According to the media-savvy politician, the government should take advantage of the situation. In order to anticipate the negative impacts of global recession, Indonesia should be able to boost its export growth.
"We should take this opportunity so it could be a turning point for our industry sector," President Jokowi told a cabinet meeting here on Monday, September 16, 2019.
According to Bank Indonesia (BI), ongoing trade tensions coupled with geopolitical risks are undermining world trade volume and global economic growth. A softening of growth is predicted in the US as exports decline along with non-residential investment. Flatter economic growth in Europe, Japan, China and India is the result of restrained external sector performance and dwindling domestic demand.
In the meantime,global economic moderation continues to suppress commodity prices, including the global oil price. In response, several countries have introduced fiscal stimuli and loosened monetary policy, including the US Federal Reserve that decided to lower its policy rate in July 2019. In addition, global financial market uncertainty remains, which has precipitated a shift in global funds to safer assets, such as government bonds in the US and Japan, as well as gold.