Stability of the financial services sector relatively well maintained: OJK

Jakarta (ANTARA) – The stability of the Indonesian financial services sector is relatively well maintained, said Chairman of the Board of Commissioners of the Financial Services Authority (OJK), Mahendra Siregar.

He made the statement during an online press conference on the OJK Board of Commissioners (RDK) meeting in Jakarta on Thursday.

The intermediation performance of financial services institutions (LJK) has also shown steady growth, in line with the growth of the national economy.

The positive performance contributed to the continued recovery of the national economy amid high global economic uncertainty, he said.

“Indonesia’s economic growth forecast also increases slightly, but projected growth in 2022 can still be sustained,” Siregar added.

In addition, he informed that the economic indicators also currently show a relatively good performance of the national industry, as evidenced by the trade balance, which recorded a high surplus, the Purchasing Managers Index (PMI) or index manufacturing, which is in the expansion zone, as well as solid public consumption.

According to Siregar, the national economy has remained relatively stable amid pressures in international financial markets due to the tightening of monetary policy by various central banks, the ongoing geopolitical conflict between Russia and Ukraine and the decline of the global economic growth.

“The high risk of a slowdown in the global economy has prompted the IMF (International Monetary Fund) to estimate that more than a third of the world’s countries will begin to contract growth this year and also next year (2023)” , he noted.

A global recession would affect oil and other commodity prices in 2023, Finance Minister Sri Mulyani Indrawati said earlier.

“The United States and Europe will clearly face a very high potential for recession, why? (It is) because their inflation is very high, the highest for 40 years and is currently being fought by a increase in benchmark interest rates and a tightening of liquidity,” she noted.

At first, central banks in the United States and Europe still viewed the inflation as temporary and attributed it to the disruptions caused by the COVID-19 pandemic. However, with the emergence of the conflict between Russia and Ukraine, oil is also used as one of the instruments of war.

Therefore, the Minister said that she believes that if various developed countries go into recession, the demand for oil will fall and the pressure of rising oil prices will probably decrease, thus reducing oil prices by $100 per barrel.

In addition to the potential for recession, Indrawati said another factor that will affect global oil and commodity prices is the protracted conflict between Russia and Ukraine.

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Stephen V. Lee