IMF Appreciates Indonesia's Success In Maintaining Economic Stability Amid The Pandemic

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JAKARTA - Indonesia is considered quite successful in maintaining the stability of the national economy in the midst of crisis pressure due to the COVID-19 pandemic. These efforts are carried out through appropriate, firm policy responses and strong macroeconomic performance.

This assessment was provided by the International Monetary Fund (IMF) in its assessment through the 2021 Article IV Consultation report, as released by Bank Indonesia (BI) in its official statement, Wednesday, March 23.

In the report, the IMF considers that the Government of Indonesia through the National Economic Recovery (PEN) program and accommodative monetary policy measures have proven successful in encouraging credit performance to keep moving amid the threat of stagnation due to the crisis.

According to BI, the IMF's Board of Directors appreciates the various policies implemented by the government, including its commitment to gradually return the upper limit of the fiscal deficit to three percent by 2023.

In addition, the Indonesian government has also taken monetary policy to be ahead of the curve while still paying attention to the inflation rate. The government's steps in promoting the deepening and inclusion of financial markets, particularly through digitalization and measures to mitigate climate change, are another positive note in the view of the IMF Board of Directors.

"Not only that, the IMF also appreciates structural reform efforts in the real sector and the financial sector to increase investment, encourage growth and mitigate the scarring impact of the pandemic," the report said.

With the right set of policies, the IMF believes that the Indonesian economy will continue to strengthen in 2022-2023, supported by improving domestic demand and support from global commodity conditions.

This projection is in line with the results of the BI assessment which predicts that the momentum for improving the national economy will continue in 2022.

"Bank Indonesia is committed to continuing to optimize the policy mix in order to maintain stability and support national economic recovery. Policy synergy with relevant authorities will be carried out, particularly in the context of accelerating vaccination, opening up productive economic sectors and efforts to encourage increased financing in priority sectors," said BI, in its official statement.