The global economy continues to be marked by increasing inflation amidst the lower-than-projected growth.Jakarta (ANTARA) - Bank Indonesia (BI) has revised downward its global economic growth forecast for 2022 to three percent, from 3.4 percent earlier, citing geopolitical tension, among other factors.
"The global economy continues to be marked by increasing inflation amidst the lower-than-projected growth," BI Governor Perry Warjiyo stated during a press conference following a monthly meeting of the BI board of governors in Jakarta on Thursday.
The geopolitical tension between Russia and Ukraine, coupled with the imposition of wider sanctions on Russia over its military operation in Ukraine and enforcement of the zero COVID-19 policy in China added to the disruption of the supply chain, he remarked.
The disrupted supply chain, coupled with widespread food protectionism in various countries, fueled global inflationary pressures due to the higher commodity prices, he stated.
Various countries, including the United States, had responded to the higher inflationary pressures by tightening more aggressive monetary policy that would potentially hinder global economic recovery and trigger high stagflation risks, he remarked.
"Economic growth in various countries, such as the United States, Europe, Japan, China, and India, is expected to be lower than projected earlier," he stated.
The development would have an impact on uncertainty about the global financial market, thereby leading to limited foreign capital flows and applying pressures on the exchange rates in various developing countries, including Indonesia, he noted.
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Translator: Agatha Olivia V, Suharto
Editor: Sri Haryati
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