Sri Mulyani: Indonesia Only Needs 1.5 Years To Return To Economic Level Before The Pandemic

Minister of Finance Sri Mulyani (Photo: Screenshot of Youtube Bisnis Indonesia)

JAKARTA - Minister of Finance (Menkeu) Sri Mulyani said that Indonesia was one of the few countries that was able to recover quickly after COVID-19. In fact, the Minister of Finance said that currently Indonesia's economic capacity has been able to exceed the period before the pandemic occurred.

"Indonesia is a country that is able to quickly return to its pre-covid GDP (gross domestic product) level. In the third quarter of 2021, Indonesia's GDP has already exceeded the pre-covid level. Other countries like the Philippines, and Malaysia they haven't. This illustrates that each economy's recovery capacity is not the same," he said when speaking at the Bisnis Indonesia webinar forum, Wednesday, December 15.

According to the Minister of Finance, the policy of implementing strict Community Activity Restrictions (PPKM) had an impact on economic activity in the third quarter. However, the recovery momentum was relatively maintained, as reflected in quarter-on-quarter growth which continued to accelerate at 1.6 percent.

Furthermore, the state treasurer then compared the current economic pressures with the financial crisis in the late 90s.

"When the 97/98 financial crisis caused mass bankruptcy, it took up to four years to return to pre-crisis levels," he said.

In the Minister of Finance's notes, there are several differences as to why the crisis due to COVID-19 tends to be more manageable. First, the financial sector, especially banking, has better resilience than before because it has sufficient quality reserves.

Second, the role of fiscal expansion and accommodative central bank monetary policy in maintaining financial system stability and the national economy. And the last one is the application of the benchmark interest rate at a low level in order to stimulate economic activity.

"Indonesia's recovery is going very fast, about 1.5 years to get to the previous level," closed the Minister of Finance Sri Mulyani.