Why Is Sri Mulyani So Optimistic That Economic Growth In The First Quarter Of 2021 Will Be Positive?

Minister of Finance, Sri Mulyani Indrawati. (Photo: Doc. Setkab)

JAKARTA - The government is optimistic about Indonesia's economic growth in the first quarter of 2021 amidst the ongoing COVID-19 pandemic and declining household consumption. In fact, it is estimated that economic growth will approach zero at a relatively mild negative or positive level.

However, to achieve positive economic growth, three important factors need to be supported. One of them is how the transmission of COVID-19 in the country can be controlled.

Finance Minister Sri Mulyani said the optimism stems from the government's efforts to calibrate the demand and supply side policies. On the demand side, the availability of vaccines will greatly affect.

"For the 40 percent of people with the lowest level of welfare, this is covered by a social safety net, while those over 40 percent depend on handling COVID-19. So I believe vaccines can achieve improved consumption," he said, in an official statement, Monday, February 15. .

According to Sri Mulyani, with the improvement in consumption, the government has a great opportunity for a better national economic recovery this year.

On the supply side, said Sri Mulyani, President Joko Widodo (Jokowi) paid attention to completing all derivative regulations of the Job Creation Law. Because, the enactment of this law will provide a new way of investing in Indonesia and will provide a better position for Indonesia than other countries.

"We have put what we can put in place and we will continue to monitor it. With that there is no reason not to be optimistic," he explained.

The determining factors for Indonesia to get out of the crisis

Sri Mulyani said that the first thing that determines whether Indonesia's economic growth can be positive or not is how the transmission of COVID-19 in the country can be controlled. From the first cases found on March 2, 2020, the total cumulative cases in Indonesia reached 1,223,930 people.

Second is the success of vaccination. Sri Mulyani said, this program was a positive factor in suppressing transmission and restoring public confidence to resume activities.

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Finally, the 2021 state budget (APBN) will continue to support economic recovery. An expansionary APBN to continue handling the pandemic and strengthening the economy through reallocation to productive spending and strengthening the national economic recovery program.

"And how can we actually use this crisis to carry out structural reforms so that Indonesia not only comes out of the COVID-19 crisis but also comes out and becomes a stronger country," he said.

As is known, Indonesia in 2020 will experience negative growth of 2.07 percent. This year is predicted to be better, namely between 4.5 percent to 5.3 percent. This projection is slightly lower than the previous government's target in the range of 4.5 percent to 5.5 percent.

Sri said Indonesia's economic pressure throughout 2020 was moderate compared to G20 member countries and Southeast Asia. It was noted that Indonesia's economic growth was minus 2.07 percent (yoy).

Furthermore, Sri said other countries experienced a deeper economic contraction. Although, a number of countries were able to grow positively, such as China by 2.3 percent and Vietnam by 2.9 percent last year.

"Compared to the G20 and Southeast Asian countries, our economic contraction is relatively moderate. This means that we are able to handle COVID-19 and are able to reduce the impact of COVID-19 in the economy, so the impact is not as severe and as deep as other countries," he said at the 2021 TNI-Polri Rapim event. , Monday, February 15th.

For example, Singapore experienced an economic contraction of minus 5.8 percent and the Philippines 9.5 percent. Then, developed countries such as the US minus 3.5 percent, Germany minus 5 percent, Russia minus 3.1 percent, France minus 8.4 percent, and Italy minus 8.8 percent.

Then, Indonesia's budget deficit is only 6.09 percent or not as deep as other countries. Meanwhile, a number of developed countries even exceeded 10 percent. Among them the US is close to 15 percent and France 10.8 percent.

Not only that, said Sri Mulyani, Indonesia could still maintain its debt-to-GDP ratio relatively more prudently and prudently than other countries, namely 38.5 percent. Meanwhile, China's debt ratio reaches 66 percent to GDP, India is close to 90 percent, Malaysia 66 percent, Singapore 131 percent, the Philippines 48 percent, and Thailand 55 percent.

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