Stafsus Sri Mulyani Asked Not To Debate Whether Indonesia Was In A Recession Or Not

JAKARTA - The COVID-19 pandemic has had a negative impact on affected countries. As a result, one by one experienced an economic recession. The United States, Singapore, Japan, experienced recession due to two consecutive quarters of negative economic growth. Meanwhile, Indonesia's economy in the second quarter was already negative, but in the first quarter it was still positive.

Recession or not, is determined by economic growth in the third quarter. These conditions make the threat of a recession in Indonesia in sight. So no wonder, at this time it is something that is debated.

The Minister of Finance's Special Staff for Strategic Communications, Yustinus Prastowo, spoke up about this. According to him, there is no need to argue about whether Indonesia is a recession or not. Currently, he said, the important thing is that the government is present for the community.

"What is important now is how the state will really be present when the market is paralyzed," said Yustinus in a discussion entitled "Recession Before Eyes: What Should Indonesia Do?", Tuesday, August 25.

In crisis conditions due to the COVID-19 pandemic, said Yustinus, the state must be present to help people who need assistance. He said the government already had a strategy so that Indonesia would later emerge from the economic crisis due to the pandemic.

"Now, it is not whether we are going into a recession or not a recession, but whether we have a policy response that makes us calm ourselves. We feel confident and in the medium term, we have a scenario to get out of this crisis in the long term," he said.

According to Yustinus, the whole world is currently still facing challenges arising from COVID-19. The economic turmoil due to the pandemic cannot predict when it will recover to normal.

One example is that of New Zealand. Yustinus said that the country had zero positive cases of COVID-19 for three months, but now there are more infected people.

This means, said Yustinus, that overcoming the COVID-19 pandemic, especially in Indonesia, is not an easy matter. Therefore, he hopes, all parties will participate in contributing to overcoming all the negative impacts that may arise.

"Health is an important determinant factor, without convincing COVID control it is difficult to open our economy. This is what we need to understand. So we need cooperation, the government may not be alone (dealing with the impact of the pandemic)," he explained.

Previously, Finance Minister Sri Mulyani had projected that the highest economic growth in the third period of 2020 could only touch 0 percent. However, there is a chance that third quarter growth will fall into the negative zone if it fails to reach a neutral zero percent position.

"The outlook for the third quarter is negative 2 percent to 0 percent. The shift from the movement has not looked very solid yet," he said, at a press conference for the National Budget in Jakarta, Tuesday, August 25.

Meanwhile, Sri said, the projected economic growth at the end of 2020 would be in the range of minus 1.1 percent to 0.2 percent. The estimated realization rate has taken into account the economic achievements in the second quarter which were minus 5.32 percent.

If Sri Mulyani's prediction is true, then Indonesia will eventually enter the abyss of a technical recession, namely a contraction in growth for two consecutive quarters. Where in the second quarter of 2020 the Indonesian economy was at minus 5.3 percent.

"It is admitted that this is quite a challenge. Because in the third quarter, consumption has not shown the recovery as we expected, and we still have 1.5 months for this third quarter," he said.