IMF confident on Indonesia's capability to prevail from ensuing global economic downturn

Visiting International Monetary Fund (IMF) Managing Director Christine Lagarde conveyed her optimism that Indonesia would be able to prevail from the ensuing crisis that hit several economies across the world, saying that Indonesia has proved it in the peaks of crisis occurred several times in the past. "You can see how Indonesia gone through tough global financial crisis and the 'taper tantrum'in 2013. With all those experiences, Indonesia should have more capabilities to address economic turbulences at present if compared it in the past,"Christine told those attending general lecture session held on the campus of University of Indonesia (UI) on Tuesday.

She said that Indonesia has been facing slower growth in the last four years and saw a below-5-percent growth, which was the lowest level since the nation encountered global financial crisis. "The downturn would not last long. Indonesia can change its lane to the higher growth one. To be in that lane, Indonesia must correctly position itself amidst the ongoing global financial and economy downward,"she pointed out.

She said that Indonesia and other developing countries are now facing the negative impacts from the ongoing global financial volatility resulted from the fluctuation of global economy crisis.

She estimated that the world growth will be in moderate pace this year, or may even slower if compared to the estimation drawn last year.

The gloomy economy outlook for this year would be envisaged from the recovery in developed countries which is slower than initial expectation, coupled by the prolonged economy slowdown in many developing countries particularly those in South America region.

According to her, Indonesia would be very much affected by the economic restraint in China that has been Indonesia's prime trading partner.

Besides, the continuing decrease of commodity prices would also add to Indonesia's economy saga, she added. "Those two factors indicate that demands on Indonesian products from external markets would be slowing down in the future," she said.

On the other hand, pressure would also come from the United States as the nation may increase its rate benchmark along with symptoms of economy recovery already felt there. "It may risk developing countries, including Indonesia as it may exacerbate the capital flow, incite higher rate benchmark and further financial volatility,"she added.

During her meeting with Indonesian President Joko Widodo, Lagarde conveyed the plan to hold IMF and World bank annual meeting in Indonesia's resort island of Bali in October 2018. Endi