The Bad News: After The IMF, BI Also Cuts Economic Growth To 4.1 Percent

JAKARTA - Bank Indonesia (BI) has again cut its projection for Indonesia's economic growth throughout 2021 to 4.1 percent to 5.1 percent year-on-year (yoy).

This decision is the second time that BI has corrected its growth rate after earlier on Thursday, February 12, it declared an adjustment from 4.8-5.8 percent to 4.3-5.3 percent.

BI Governor Perry Warjiyo said that although the trend of gross domestic product (GDP) formation would still increase compared to last year, this was not in line with the planned expectations.

"We are sure that consumption will definitely increase, but the increase is not what we previously projected," he said in an online press conference after holding a Board of Governors Meeting on Tuesday, April 20.

Perry noted that the low level of private consumption can be expected to be the cause of the less aggressive economic growth rate this year

"Vaccinations that have been intense in the second quarter of 2021 can be a driving force for acceleration. But we see that the currently restrained mobility of society also presents its own challenges, "he said.

In previous VOI reports, the global financial institution International Monetary Fund (IMF) corrected Indonesia's economic growth in 2021 from the previous 4.9 percent to 4.3 percent.

Finance Minister Sri Mulyani said that the prediction was part of an assumption that could not be determined amidst the continuing uncertainty due to the COVID-19 pandemic.

“For us all current predictions are subjective to uncertainty. So there are various assumptions, such as vaccinations, a third wave of pandemic spread, and so on, "he said during the National Economic Recovery Acceleration Workshop in Bali which was broadcast virtually, Friday, April 9.

The government itself is optimistic that Indonesia's economic growth will reach 4.5 percent to 5.5 percent this year.