Indonesia Not Facing Crisis, But Economy At Critical Stage

Jakarta (Antara Bali) - The Executive Director of the Institute of National Development and Finance (Indef), Enny Sri Hartati, said Indonesia is not facing a crisis currently, but its economy is on the verge of entering a critical stage.

"If we do not respond immediately, we will enter a critical stage soon," Hartati said during a discussion on how to mitigate the possibility of another economic crisis.

Hartati explained that such a possibility had emerged due to the weakening of the Rupiah's exchange rate against the U.S. dollar in August, due to which capital outflow or 'capital flight' had occurred, prices of basic goods had shot up and foodstuff inflation had reached 0.91 percent, month-over-month or 9.26 percent, year-over-year.

She also pointed out that workers' demonstrations had risen, and employee layoffs had reached more than 100 million, which clearly reflected a poor economic state.

Meanwhile, the government had reiterated that the Indonesian economy's fundamentals are still strong and stable.

However, Hartati demanded that the government should not only provide good news to the public, but also present a true picture of the current economic conditions, including that of the Malaysian economic crisis, which has deteriorated into a political crisis.

The government must immediately take concrete and quick action to mitigate the potential risk of an economic crisis erupting, the economist stressed. (WDY)