Sri Mulyani Responds To IMF Economic Growth Correction: Subjective Amid Uncertainty

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

JAKARTA - Finance Minister Sri Mulyani has finally opened a vote related to the IMF (International Monetary Fund) correction on Indonesia's projected economic growth in 2021 from 4.9 percent to 4.3 percent.

"For all of us predictions are now subjective to uncertainty. So the assumptions are various, such as vaccination, there is a third wave of pandemic spread, and others," he said at the National Economic Recovery Acceleration Meeting in Bali that was broadcast virtually, Friday, April 9.

According to Minister of Finance Sri Mulyani, the best thing the government can do at the moment is to optimize all resources, including creating targeted policies.

"But in terms of policy that we can form, is to continue to make budget adjustments. Therefore, in 2021 the government will make adjustment efforts," he said.

The move was claimed by Sri Mulyani quite successfully. This can be seen from the rate of growth contraction that is not very deep compared to some other countries.

"We've been able to withstand contractions not too deeply. If other countries can get to minus 8-9 percent, we are only minus 2 percent," he added.

Then, the former Managing Director of the World Bank also explained that in terms of the budget Indonesia has more volatility maintained.

"Our fiscal deficit is relatively smaller, which is 6 percent. Compare that with other countries that can reach double digits, such as the United States which reaches 15 percent," he said.

Furthermore, the Minister of Finance said the government still sees the vaccination process as the main game changer. Therefore, he hopes that the program can continue to be implemented so as to increase the confidence of the economic sector in order to accelerate the recovery faster.

"To date more than 12 million people have received the COVID-19 vaccine, and this is important to boost confidence in the economy," he said.

For the record, the IMF's international financial institutions have cut indonesia's economic growth projection for 2021 to 4.3 percent from 4.9 percent previously. The assumption itself is based on two things.

The first is the forecast of more moderate fiscal expansion while continuing to increase social spending and capital expenditures in the medium term.

Second, related to the monetary side with the main reference inflation that is still in trend until the close of the first quarter of 2021.