BI: G20 Countries' Synergy Contributes to Global Economy Recovery

(Jakarta, InfoPublik) – The meeting between the G20 countries which takes place in 2022 will be crucial in addressing the global economy’s ever-increasing challenges.

Amidst the challenges and difficulties faced, Indonesia's G20 presidency provides a forum for dialogue, cooperation, and coordination of policy responses between countries to support recovery and maintain robust and balanced economic growth.

Countries are currently faced with continuously higher-than-expected inflation, tighter financial conditions, Russia's conflict with Ukraine, the protracted COVID-19 pandemic, and a supply-demand imbalance further slows the global economic outlook.

The cost of living has been under pressure in many nations due to rising concerns about the price of food and energy, which has increased inflationary pressures. In addition,  extreme weather brought on by climate change also puts the world economy at risk, and the shift to a greener economy is being hampered by growing energy costs.

Perry Warjiyo, the Governor of Bank Indonesia (BI), expressed his appreciation to the G20 participants for their initiatives. On Monday, November 7, 2022, he said in Jakarta, "Since the start of the presidency, the G20 has worked together to bring up major global issues and to deliver tangible and collaborative solutions to boost recovery."

In keeping with that, the G20 Roadmap on Cross-Border Payments (CBP) implementation has made the payment system issue a significant topic of discussion. The goal is to achieve faster, cheaper, transparent, and inclusive cross-border payments because doing so will have significant positive effects on the global economy. Additionally, the exploration of Central Bank Digital Currency (CBDC) is aimed at facilitating this.

According to Bank Indonesia, the G20 leaders' summit will offer direction, guidance, and market confidence for future economic prospects and the stability of the financial system. This is consistent with the G20 members' reaffirmation of their commitment to calibrated, planned, and effectively communicated policies to support sustainable recovery and to lessen the scarring effects of pandemic and spillover impacts to support strong, sustainable, balanced, and inclusive growth.

This optimism is consistent with the domestic economy's maintained performance, which results in an estimate of 4.5–5.3% economic growth in 2022. Strong export, increased private consumption and investment, as well as people's purchasing power despite growing inflation contribute to the economy's improvement.

Inflation in October 2022 was recorded at 5.17% (YoY), which was lower than both the initial projection and the 5.95% CPI inflation for the previous month. While the US dollar has been strengthening, the exchange rate for the rupiah remained stable, and it depreciated significantly slower than the currencies of several other developing nations, like India, Malaysia, and Thailand.