Nusa Dua, Bali (ANTARA News) - Indonesian Finance Minister Sri Mulyani Indrawati has warned of potential risks, including the imminent Fed Rate hike, which may hamper the country`s economic growth next year.

"We still believe that the risk of the Fed (rate hike) is very likely because they have stated they will continue to raise the interest rate next year," she told Antara in Nusa Dua, Bali, on Tuesday.

The Fed rate hike may lead to the US dollar`s appreciation, thereby making borrowing costs more expensive and investment unable to grow as expected, she said.

In addition, the risk of trade war among developed nations will remain a main issue in the global economy next year because it may create uncertainty over the performance of exports and imports, which are one of the sources of economic growth, she noted.

"The risk of trade war is still very real and may even escalate because it is getting politically motivated. If that is the case, it may create uncertainty over exports," she said.

The other external risk is related to the geopolitical situation, which may affect the prices of global commodities such as oil, she said.

After all, she remained optimistic that the national economy would grow by 5.3 percent thanks to rising consumption, fueled by low inflation and high spending ahead of the general elections.

The International Monetary Fund (IMF) in its latest publication has revised downward its global economic growth forecast for 2018 and 2019 from 3.9 percent to 3.7 percent, citing several risks that could begin to have a real impact.

In the World Economic Outlook report, the Indonesian economy is projected to grow 5.1 percent in the 2018-2019 period.


Reporting by Satyagraha

Editing by Suharto

Reporter: Antara
Editor: Gusti Nur Cahya Aryani
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