BI Governor: Global Economic Slowdown Driven by US Tariff Policy

Jakarta, VIVA – Bank Indonesia Governor Perry Warjiyo has predicted that global economic growth will slow down and global inflation will rise again. One of the contributing factors is a policy implemented in the United States (US). 

Warjiyo stated that global economic risks are currently increasing, accompanied by heightened geopolitical tensions and trade fragmentation. 

"The political developments in the US are expected to be followed by a more expansionary fiscal policy and an inward-looking economic strategy, including the implementation of high trade tariffs and strict immigration policies," he said on Wednesday (November 20).

He further stated that these developments are likely to pose risks of slowing global economic growth. 

"These developments will lead to risks of slower economic growth and a resurgence of global inflation," Warjiyo remarked. 

Warjiyo further predicted that in the US, the decline in inflation will proceed more slowly. Consequently, the reduction in the Federal Funds Rate (FFR) is also expected to be more limited. 

"Meanwhile, the need for financing a larger fiscal deficit is driving an increase in yields on US Treasury bonds, both for short-term and long-term maturities," he concluded.