Warjiyo noted that the United States’ protectionist policies have brought about major changes to the global economic landscape. Political tensions continue, and it remains unclear when they will end.
“It’s important to remember this and be vigilant, as Ronggowarsito advised,” Perry said at the 2025 Bank Indonesia Annual Meeting (PTBI) here on Friday, referring to one of the great poets in Javanese culture.
He also explained that the dimming global economic outlook is characterized by five characteristics.
The first is that the United States’ tariff policy continues, resulting in a decline in world trade, a decline in multilateralism, and the rise of bilateralism and regionalism.
Second, global economic growth is slowing, particularly in the United States and China. Meanwhile, the European Union, India, and Indonesia are considered quite strong. The slower decline in inflation complicates central bank monetary policy.
Third, high government debt and interest rates in developed countries are caused by excessively large fiscal deficits. This has resulted in high interest rates and fiscal burdens in developing countries.
Fourth, the high vulnerability and risk of the global financial system due to multiple derivative product transactions, especially hedge funds with trading machines, has an impact on capital flight and exchange rate pressures in emerging markets.
Fifth, there’s the rise of cryptocurrencies and stablecoins from the private sector. Warjiyo stated that there’s a lack of clear regulation and oversight regarding this, necessitating the presence of a central bank digital currency (CBDC).
The final or fifth characteristic is that global turmoil has had a negative impact on various countries, including Indonesia.
“We need an appropriate policy response. Maintaining stability, encouraging higher growth and resilience, and independence,” Warjiyo said.
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Translator: Rizka Khaerunnisa, Katriana
Editor: Azis Kurmala
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