OECD Estimates Indonesia's Economic Growth In 2021 To Touch The Level Of 4.9 Percent

Worker illustration. (Photo: By courtesy)

JAKARTA - The Organization for Economic Co-operation and Development (OECD) projects that Indonesia's economy will grow in the range of 4.9 percent in 2021. Not only that, but the multilateral institution also projects the growth rate to reach 5.4 percent by 2022.

OECD Secretary-General Angel Gurria revealed that Indonesia's economic recovery due to the pandemic will take place gradually and depend on handling in the health sector.

"Indonesia is facing its toughest challenges since the 1997 crisis. Through proper reforms, Indonesia can harness the energy and talents of its young population and make the economy move forward again", she said as quoted on the official website of the Ministry of Finance, Friday, March 19.

Responding to this, Minister of Finance Sri Mulyani Indrawati explained several strategic steps by the Indonesian government to face extraordinary situations due to the pandemic. She said the government was loosening fiscal and monetary policies, one of which was by widening the deficit to 6.09 percent of gross domestic product (GDP) in 2020.

“I think this is relatively low compared to other OECD countries, right? So we will experience a deficit in 2020 of around 6.1 percent and at the same time the economic condition is also relatively good and the contraction is around 2 percent. That is one of the achievements that we also used to be able to respond to the situation this year", she said.

The minister added, government spending is now focused on dealing with the pandemic, especially in terms of health, social protection, and maintaining the continuity of the business world. With the right response, Sri Mulyani believes that Indonesia's poverty rate will be able to stay at around 10.4 percent or lower than the World Bank's prediction of above 11.4 percent.

"Now we really need to focus on how to ensure that the recovery process will continue. At the same time, we will also accelerate this recovery and look at areas that need more policy support. This is very pragmatic, but also flexible, transparent, and accountable", concluded the Minister of Finance.