Indonesia warns banks about financial risks
2023.01.09 01:57
Indonesia warns banks about financial risks
Budrigannews.com – On Monday, the finance minister of Indonesia advised the country’s top bankers to be wary of balance sheet risks this year due to numerous global risks, including the possibility of debt crises in some nations.
Sri Mulyani stated, “In 2023, the ups and downs, whether our economy is healthy or not really depend on the banking sector today.”
She advised bankers to “continue to be constantly surprised” by global developments and to “take care of your own banks well too” if she was protecting the state budget.
According to her, the largest economy in Southeast Asia was able to maintain economic stability throughout a remarkable year in 2022. She predicted that economic growth would have remained resilient at around 5% in the fourth quarter, following growth of 5.7% in the third quarter.
Sri Mulyani stated that some other nations did not fare as well, predicting “not only recession but the potential of debt crisis in countries where debt levels are very high” for this year.
She also warned of a Cold War-like division of the world into geopolitical blocs.
She stated that the Indonesian government would continue to maintain a budget that was adaptable, including anticipating a potential revenue loss as a result of lower commodity prices.
The minister added that it did well last year, citing a fiscal deficit of 2.4% of GDP, which was much smaller than planned because of strong revenue collection from a boom in commodity exports.
As of November, Indonesia’s banking sector had a capital adequacy ratio of 25.49 percent and a non-performing loan ratio of 2.65%.
Its central bank increased interest rates by a total of 200 basis points the previous year, and some economists anticipated additional rate increases this year to bring inflation back within the target range of 2 to 4 percent. Inflation in December was 5.51 %.
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