Tinkering With Economic Growth, This Time Sri Mulyani Projected A Maximum Of 1 Percent

JAKARTA - Three months after COVID-19 hit Indonesia, the bad effects are increasingly being felt in all sectors. The uncertainty about when the virus outbreak will end also has a major impact on the Indonesian economy. Due to this condition, the government has revised the projection figures for national economic growth in 2020.

Finance Minister Sri Mulyani said Indonesia's economic growth this year would only be in the range of minus 0.4 percent to 1 percent, or included in a tough scenario. This is due to the possibility of a deep economic contraction in the second quarter of this year.

"The projection outlook is minus 0.4 percent to 1 percent. For the upper limit we have lowered it from 2.3 percent to 1.0 percent," he said at a meeting with the DPR Budget Agency on Thursday, June 18.

As is known, previously the government still used the projection of Indonesia's economic growth this year in the range of minus 0.4 percent to 2.3 percent.

Sri Mulyani explained that this change in projection was due to the uncertainty over the end of the COVID-19 outbreak. In fact, the number of positive cases is increasing every day, this is also in line with the increasing number of rapid tests being carried out.

In the second quarter, said Sri, the national economy is predicted to be minus 3.1 percent or a drastic drop from the realization in the first quarter of 2.97 percent. The projection for national economic growth this year will depend on the realization in the third and fourth quarters.

However, said Sri, many other countries had a worse decline than Indonesia in the second quarter. At the ASEAN level, the economic contraction in Malaysia and Singapore reached minus 8 percent and minus 6.8 percent, respectively.

Meanwhile, other Asian countries are also projected to experience a fairly deep contraction, such as India minus 17.4 percent and Japan minus 8.3 percent. Only China is predicted to be able to achieve positive economic growth, namely 1.2 percent.

Meanwhile, in developed countries, the situation is also very worrying. The economy of the United States (US) in the second quarter of 2020 is estimated to have contracted minus 9.7 percent. The contraction in the UK was even deeper at minus 15.4 percent. Germany is expected to post a contraction of 11.2 percent. Then France is expected to record a contraction of minus 17.2 percent.

The government is targeting economic growth in 2021 to increase. In the Macroeconomic Framework and Principles of Fiscal Policy in 2021, economic growth is pegged at the range of 4.5-5.5 percent.

Sri Mulyani emphasized that the government is working hard to contain the negative impact of the COVID-19 outbreak on the national economy. There have been several attempts by the government to keep the economy growing amidst these difficult conditions.