Bisnis.com, JAKARTA – Finance Minister Sri Mulyani has warned that developing and less developed countries will face a storm of risks from rising energy costs and a food crisis in 2023 .
This difficulty will be accompanied by inflation, the strengthening of the dollar and a rise in the benchmark interest rate. With the Federal Reserve being so aggressive in monetary tightening, the consequences are not good for developing countries and will make it harder for them to issue bonds, he said.
“This storm is definitely very strong. Developing and less developed countries are in a very serious situation, a difficult situation,” Sri Mulyani said in Washington, in an interview with Bloomberg on Wednesday (10/12/2022).
About 15 developing countries listed dollar-denominated government bonds at prices more than 1,000 basis points higher than US Treasury bills.
This figure is above the threshold for debt considered to be in difficulty and the number of countries has more than doubled since the beginning of the year.
Sri Mulyani will chair the fourth G20 meeting of finance ministers and central banks. At the last meeting in April, a number of state officials from the United States, Canada and several European countries stood down when representatives from Russia began speaking.
Meanwhile, a number of countries are showing resilience that is unlikely to last long. Several other countries need loans from the International Monetary Fund.
He revealed that countries that cannot get fertilizer will face food shortages over the next 6 months ahead of a harsher winter due to rising energy prices.
Behind the hardship for the world economy, Sri Mulyani underlined the importance of the Indonesian presidency of the G20 and the always Russian involvement.
One of the advantages of the G20 over the G7, a smaller group of wealthy countries, is that this group has the necessary breadth to address global issues.
A country’s exit risks fragmenting the global economy, which could increase the difficulty of addressing issues such as climate change, increasing financial inclusion, or reaching debt relief deals. poor countries.
“The true strength and value of the G20 is that whatever happens today, the world will need this kind of cooperation, and this inaugural economic forum like the G20 deserves to be continued, maintained and preserved” , did he declare.
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