Amid global uncertainties, the United States' inflation rate declined, albeit still far from the preferred two percent rate, exacerbating doubts and uncertainty over the reduction in the Fed Funds Rate (FFR). The FFR, or the rate at which depository institutions lend money to one another, that is currently high, in the range of 5.25-5.50 percent, is forecast to last at least until the first half of this year. Geopolitical tensions globally remain unresolved, adding another layer of uncertainty to economic forecasts and financial markets.
China's economic growth had yet to reach the expected level on account of a property crisis and weakening consumption power. This trend will also contribute to the slowing down of the global economy and threaten the stability of the global financial system. Notably, China's GDP growth rate in 2023 was below target at 5.6%, reflecting the challenges faced by its economy. This has led to concerns among investors and policymakers about the broader implications for global economic performance.
Amid global uncertainties, Indonesia's financial system remains resilient and stable. This financial resilience is reflected in several aspects, including adequate liquidity, decreasing credit risks, potent capital, and a sound level of corporate resilience. Indonesia's banking sector, for instance, reported a non-performing loan (NPL) ratio of just 2.19 percent as of December 2023, marking a significant decline from the previous year. These indicators point to the effectiveness of Indonesia's financial policies in managing risk and maintaining stability.
In 2023, Indonesia's economy stood strong despite facing threats posed by global economic slowdown and rising global inflationary pressure, as evidenced by the country's success in achieving an economic growth rate of 5.05 percent. This feat was a result of the intensification of government spending at the end of the year as well as the acceleration of the development of several national strategic projects. Additionally, Indonesia's debt-to-GDP ratio remained manageable at 41.8% in 2023, reflecting prudent fiscal management amidst challenging economic conditions.
Source: click here
Source: click here
April 04, 2024
