Dian Kusumo
IDXChannel – The Financial Service Authority or OJK stated that, the world will be concomitantly confronted with the rise in inflation rate and risk of recession in 2023.
In handling these issues, the government either has to raise the interest rate to reduce inflation or reduce the interest rate to stimulate the economy, thereby preventing recession.
The Monetary Authority cannot handle these challenges at the same time, given that its main duty is to only control the inflation rate and no to mitigate the economic decline.
Despite this, if the price is rising high and it is copled with the declining economy then the government has to intervene in handling this by encouraging growth.
“Next year, the two things will happen together. Inflation is high, the recession is severe, so if you want to raise interest rates, it’s even more recession, you don’t raise interest rates, but inflation continues to rise. This is an extraordinary dilemma and actually the existing instruments owned by the Central Bank are not up to the possibility of overcoming it, because the main task of the Central Bank is overcoming inflation,” Chairman of OJK Mahendra Sigerar said.
"Watch our show IDX Channel Official Youtube on the Market Headlines Program, Wednesday (21/12/2022) with the theme Inflation, Recession to Hit The World Simultaneously in 2023.
(DKH)
