TEMPO.CO, Jakarta - Finance Minister Sri Mulyani Indrawati stated that throughout 2024, geopolitical tensions and general elections in 70 countries had triggered significant uncertainty.
These two factors, she explained, were intertwined and had disrupted both global investment flows and overall economic stability.
“2024 is a super election year,” said Sri Mulyani during a plenary session at the House of Representatives in the Parliament Complex, Senayan, on Tuesday, July 15, 2025.
“At the same time, the conflict in Ukraine has continued for two years, the war in Gaza has entered its eighth month, and the rivalry between the United States, China, and Russia is intensifying.”
She emphasized that this combination has led to escalating political and global uncertainty. “This clearly disturbs investment, which always depends on certainty,” she added.
Sri Mulyani also pointed out that these geopolitical tensions have dampened investor confidence and disrupted global trade. As a result, the world economy is facing heightened instability.
“All investors are adopting a wait-and-see approach, and global trade is weakening,” she noted.
In addition to geopolitical and economic turmoil, the impact of the El Niño weather phenomenon in 2024 has further complicated the situation.
According to Sri, it disrupted global supply chains, pushed up commodity prices, and increased logistics costs.
“These disruptions have fueled pressure on financial markets and domestic price levels,” she said.
As a consequence, the rupiah weakened to Rp 16,486 per US dollar.
The Jakarta Composite Index (IHSG) dropped to 6,726.9, and inflation (particularly food prices) rose by 10 percent.
Despite the challenges, Sri Mulyani affirmed that Indonesia’s economy remains resilient.
“Alhamdulillah, we have been able to navigate these conditions. The Indonesian economy continues to recover,” she said.
She also highlighted the crucial role of the State Budget (APBN) in absorbing economic shocks and supporting national stability.
“The APBN has helped protect people’s purchasing power, supported development priorities, ensured economic stability, and kept the fiscal deficit under control.”
“Economic stability,” she concluded, “cannot be separated from the APBN’s role as a shock absorber.”
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