IMF Chief Economist Gita Gopinath voiced pessimism about the current global economic conditions. His side admitted that he was looking for signs of recovery of the global economy, but it was difficult to find them.
“Over the course of the year, it has become increasingly difficult to find these bright spots. There is potential for recovery, and we are still looking for it all over the world, but I have to admit it has become increasingly difficult to find them,” Gopinath said as quoted by CNBC.
The existence of trade tension that occurs is said to be one of the risks threatening the economy. Global growth has been restrained and is considered fragile . “The developments we have seen lately give us great concern about what will happen to future growth.
To note, the trade war between the United States (US) and China is heating up again. On Friday, August 23, 2019, President Donald Trump added. tariffs on Chinese products with a total value of USD 550 billion.
Meanwhile, Morgan Stanley revealed that the risk of a recession is still high and increasing due to the slowing economy world that is transmitted from the manufacturing sector. Conditions could get worse if the trade war continues.
“We estimate that if trade tensions escalate, we are going into a global recession (global growth below 2.5 percent) in the next three quarters, “said Morgan Stanley chief economist Chetan Ahya.
Trade War Continues
First 25 percent to 30 percent addition to USD 250 worth of Chinese products There is also an additional 15 percent tariff on Chinese products worth USD 330 billion.
That is an activity by Trump’s reason to China, which gives taxes of 5 percent to 10 percent on US items worth USD 75 billion, which will be executed steadily as of September 1.
Trump said the US needn’t bother with China. The explanation is, China is viewed as negative to the US by the conduct of the individuals who take US protected innovation.
“Our nation has lost, idiotically, trillions of dollars to China throughout the long term. They have taken many billions of dollars in our Intellectual Property Rights each year and they need to continue with it. I won’t let that occur! We needn’t bother with China and, To be straightforward, it would be better without them, “said Trump by means of Twitter on August 23, 2019.
Coordinating Minister Darmin: BI Interest Rate Decrease is a Stimulus for Investment
Coordinating Minister for the Economy, Darmin Nasution appreciated Bank Indonesia’s monetary policy in lowering the benchmark interest rate. According to him, this reduction can encourage domestic investment.
“So lowering the policy rate is a stimulus for investment,” said Coordinating Minister Darmin when met at his office, Jakarta, Friday, August 23, 2019.
Coordinating Minister Darmin said that this reduction was actually a response from various countries. This means that not only Indonesia has lowered interest rates, but all central banks of other countries have also made a reduction.
“Because other countries are also heading down. If we go down on our own, you can worry, but if others go down, we go down, this is needed to stimulate investment. Hopefully production will increase, exports will rise, the trade balance is good,” he explained.
Even so, the former Director General of Taxes emphasized that the effectiveness of lowering interest rates on the domestic economy cannot be seen in the short term. At least it will take a long time to respond to the policy. “The response from our economy to that is rarely an instant one. It must take several months,” he said.