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ILLUSTRATION. The World Bank predicts that Indonesia’s economic growth in 2020 will contract by 2%
Reporter: Yusuf Imam Santoso | Editor: Anna Suci Perwitasari
KONTAN.CO.ID – JAKARTA. The World Bank predicts that Indonesia’s economic growth through 2020 could contract by 1.6% to 2% annually year-on-year. This projection is worse than the consensus issued last June, which is 0%.
The World Bank argued that Indonesia’s economic downturn occurred because the health management of the pandemic was not optimal.
Chief Economist for East Asia and Pasific The World Bank Aaditya Mattoo explained that the Indonesian government had failed to overcome the corona virus pandemic. According to him, Indonesia is one of the countries in the Asia Pacific region that has not yet shown signs of economic recovery in the near future.
Mattoo even said that the policy of large-scale social restrictions (PSBB) implemented by the local government was less effective. To make it worse panorama Indonesia’s economic recovery.
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“Indonesia has not implemented strict isolation and appears to rely more on lighter policies,” Matto told an online press conference on Tuesday (9/29).
As a result, the World Bank predicts that Indonesia’s economic recovery will be slower than that of other countries in the Asia Pacific region. Mattoo added, economies in Asia Pacific countries like the Philippines have started to work, despite pressure on sentiment. demand global still lurks throughout the year.
He further said that to maintain the Indonesian economy this year, the government needs to carry out fiscal reforms, increasing spending. Mainly, it is used as a stimulus for social protection.
In a pandemic situation like this, social protection has a real impact on the national economy. In this way, mitigate the direct impact of the crisis and help workers affected by the pandemic, especially the poor and middle class.
The World Bank predicts that the economies of the countries in the Asia Pacific region will contract by an average of 0.9% to 3.5% by the end of this year. “The countries of the East Asia and the Pacific region should strengthen reforms in the field of trade, especially the service sector that is still protected, the financial, transport and communications sectors,” said Mattoo.
Earlier, Finance Minister (Menkeu) Sri Mulyani Indrawati said that the government’s economic growth projection throughout 2020 would be minus 0.6% year-on-year and could even contract to 1.7% year-on-year.
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The government’s projection at the end of this year is in line with several international institutions forecasting that the Indonesian economy will be in a negative zone, including the Organization for Economic Cooperation and Development (OECD) -3.3%, Asian Bank Development (ADB) -1%, Bloomberg -1%, International Monetary Fund (IMF) contracted 0.3%.
“Negative territory It will happen in the third quarter and it may still happen in the fourth quarter that we are trying to keep close to 0% at a positive level. All these forecasts are how the development of the Covid-19 case will affect economic growth, ”said Sri Mulyani at the Pesr APBN Conference, on Tuesday (9/22).
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