The International Monetary Fund (IMF) highlighted three global risks that may overshadow Indonesia’s economic recovery. The first risk is the uncertainty of the pandemic, driven by low vaccination rates, risks of lockdowns and the emergence of new variants. The second risk is short-term price shocks due to changes in long-term inflation expectations in the US and Western Europe. This expectation prompted the developed country’s central banks to tighten their fiscal policies, which has a spillover effect on emerging countries. The final risk is the slowdown in China’s economic growth, driven by its poor performance in the property sector, and inadequate policy response to CV-19, which poses the risk on global supply chains and capital markets. However, the IMF also noted that Indonesia can manage these global risks by cohesive and rapid handling of domestic CV-19, supported by accelerated vaccinations and effective measures to increase consumer confidence and economic activity.
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