Jakarta. The Financial System Stability Committee (KSSK) predicts a deceleration in global economic growth in 2024, attributed to the US debt crisis and the slowdown in the Chinese economy.

Finance Minister Sri Mulyani delivered this statement at a press conference held on Tuesday, where she was accompanied by other KSSK members, including Bank Indonesia (BI) Governor Perry Warjiyo, Financial Services Authority (OJK) Commissioner Chairman Mahendra Siregar, and Deposit Insurance Corporation (LPS) Chairman Purbaya Yudhi Sadewa.

According to the World Bank's Global Economic Prospect, global economic growth dropped from 3 percent in 2022 to a mere 2.6 percent in 2023, further diminishing to 2.4 percent in 2024.

The World Bank forecasts a slowdown in Indonesia's GDP growth, dropping from 5.3 percent in 2022 to 5 percent in 2023, and further declines to 4.9 percent in both 2024 and 2025.

Sri Mulyani emphasized the strong growth of the United States economy in 2023 but pointed out that it was tempered by fiscal pressures, specifically the challenges associated with debt payments and the debt-to-GDP ratio of the US government, which presents significant future risks.

In addition to the United States, she noted a deceleration in China's economy attributed to the persisting property crisis and mounting pressure on local government debt, particularly at the provincial level.

"Recently, the Hong Kong Court revealed that one of the biggest property companies in China, Evergrande Group, has declared bankruptcy. This has triggered the economic slowdown in China," she said.

According to Sri Mulyani, the worldwide economic downturn is generating fiscal stress in multiple nations, Indonesia included. This situation is further intensified by geopolitical tension and global fragmentation.

Despite the challenging and slowing global conditions, the Indonesian economy is anticipated to maintain its resilience on the back of strong domestic demand and 5.05 percent economic growth in the third quarter of 2023.

"Consumer spending remains strong, inflation is under control, unemployment is declining,  and the State Budget has played a pivotal role throughout 2023 as a shock absorber, thereby preserving people's purchasing power," she said.

Additionally, investments have increased since the first quarter of 2023, aligning with the acceleration of various national strategic projects.

The former World Bank Managing Director is expecting domestic economic growth to be around 5.2 percent, supported by the 2024 Presidential Election spending and implementation of national strategic projects.

The sustainability of economic growth in 2024 follows the trend observed in the fourth quarter of 2023, such as the Purchasing Manufacturing Index (PMI) consistently staying in the expansive zone and a trade balance surplus.

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