Despite The Recession, The Palace Still Believes There Are Signs Of Economic Recovery From Rising Consumption

JAKARTA - Deputy Chief Expert III at the Presidential Staff Office (KSP), Edy Priyono, said that Indonesia's economic conditions have passed their lowest point and are starting to move forward, even though Indonesia is currently experiencing a recession.

"Indonesia's economic growth in the third quarter of 2020 is still negative. However, the negative figure is smaller than in the second quarter of 2020," said Edy in a written statement, Thursday, November 5.

Edy claims that the government's strategy is to design a number of programs in the National Economic Recovery (PEN) as the right step because it continues to encourage government spending.

"This makes government consumption growth in the third quarter of 2020 positive. This fact is a positive note because it is in accordance with the countercyclical principle. This means that when the economy is sluggish, government spending becomes a mainstay to boost the economy," he said.

Edy said, government spending really needs to be carried out, as long as the economy has not fully recovered. In addition, the middle-upper class needs to be encouraged to increase their consumption.

"So far, they are thought to have put a lot of their money into savings. The government needs to support it by enforcing the rules regarding the health / Covid protocol. Because the middle-upper class will only want to go out and shop physically if they feel safe," he said.

Previously, the Head of the Central Statistics Agency (BPS) Suhariyanto revealed that the Indonesian economy in the third quarter of 2020 contracted 3.49 percent year on year (yoy).

Thus, Indonesia is officially experiencing a recession like that experienced by various countries affected by COVID-19, because for two consecutive quarters it has experienced negative growth.

For information, BPS noted a contraction in the Indonesian economy in the second quarter of 2020, namely 5.32 percent in the second quarter of 2020 because the COVID-19 pandemic had limited economic activity.

However, when compared to the second quarter of 2020, the Indonesian economy grew positively by 5.05 percent. So that the cumulative economic growth in Indonesia during the first quarter of 2020 compared to the first quarter of 2019 contracted by 2.03 percent.

"Thus, there will be a significant economic improvement and this can be a good asset to move into the fourth quarter of 2020," said Head of BPS Suhariyanto in a virtual press conference.