Sri Mulyani said, the UK is in crisis due to their own economic policies Page all – Minister of Finance Sri Mulyani mentions there are a number of reasons the UK is in a state of economic crisis as it is today (British crisis). However, the country’s recession is actually the result of wrong economic policies.

At the same time, the global economy is also not doing well. This is what makes the negative sentiment then spread even more strongly.

“It’s more specific because policy themselves, but they can also influence sentiment as they happen in a row when the US Federal Reserve raises (interest rates) 75 basis points. So it gives rise to a combination of two sentiments thatdrive during this week,” said Sri Mulyani quoted on Friday (9/30/2022).

He considered, the conditions experienced by the UK caused by the country’s fiscal policy itself. The British government plans to cut taxes and provide investment incentives for businesses, while at the same time its monetary authority raises its benchmark interest rate.

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The British government’s policy of focusing on growth made the pound sterling exchange rate plummet.

Market players are worried that the UK’s debt will increase again, even though the current debt ratio is more than 100 percent to gross domestic product (GDP).

The former Managing Director of the World Bank said that each country has its own policies in stemming the effects of the economic crisis in the UK.

“Each country has its own special situation. If we look at what is happening in England, it will certainly first cause sentiment to the whole world,” he said.

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He also said that the Indonesian economy was still fairly strong despite the impact of the crisis in the UK. The indication is that state revenues are getting bigger and debts are still within reasonable limits.

“Strong state revenues, spending that we can maintain carefully, so that the issuance of our securities is 40 percent lower, decreasing very sharply,” said Sri Mulyani.

“This also puts us in a position of not being too vulnerable (vulnerable) to the turmoil caused by these various sentiments,” he explained again.

He believes that the current state budget is in a healthy condition and ready for all the worst possibilities. State spending and revenue will be shock absorber most potent.

“If the state budget is not strong, it will not be possible to function as a shock absorber, it could even be shock producer. The exchange rate (pound sterling) which fell by 20 percent, it was because the state budget (UK) became shock producer,” he said.

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(Author: Yohana Artha Uly | Editor: Akhdi Martin First)

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