Emergency PPKM Make Indonesia's Economic Growth In Quarter III 2021 Far From Sri Mulyani And BI's Expectations?

Illustrated. (Irfan Meidianto / VOI)

JAKARTA - The government is currently implementing the Emergency PPKM policy until July 25 and it will be relaxed if COVID-19 cases in the country experience a decline. Senior Economist, Fadhil Hasan said, the impact of the implementation of the policy on the economy is very large.

Fadhil predicts that economic growth in the third quarter of 2021 will be cut sharply from the government's target of 4 to 5 percent.

"I think it makes sense that economic growth in the third quarter of 2021 will be cut sharply compared to the initial prediction. Various international and national institutions including BI stated that this third quarter economic growth will reach 3.4 percent. ," he said in a virtual discussion, Friday, July 23.

Furthermore, Fadhil said this prediction departed from experience in 2020 when the government implemented a PSBB policy in an effort to suppress the spread of the number of COVID-19 cases.

"In mid-March 2020, we saw that the economic growth in the first quarter of 2020 fell, if I'm not mistaken, by almost 2 percent compared to the first quarter of 2019," he explained.

The economy will be worse

According to Fadhil, the achievement of national economic growth at 3.5 percent is highly dependent on the handling of the COVID-19 pandemic by the government through Emergency PPKM and PPKM Levels 4 and 3 running well.

"But if the assumption is based on Emergency PPKM or this level still shows signs that are not yet good, then economic growth in the third quarter of 2021 will experience a sharp correction. Maybe in the next month the economy will continue to experience pressure," he said.

As is known, the government in this case the Minister of Finance Sri Mulyani together with Bank Indonesia is targeting the national economy to grow in the range of 3.7 percent to 4.5 percent throughout 2021. This projection is down from the original which was in the range of 4.3 percent to 5 percent. ,3 percent.

Meanwhile, Bank Indonesia again lowered the projected figure for Indonesia's economic growth this year in line with the implementation of the Emergency PPKM in this July period. The economy this year is expected to grow by around 3.8 percent, lower than the previous BI projection in the range of 4.1 to 5.1 percent with a midpoint of 4.6 percent.

Director of the Center of Economic and Law Studies (Celios) Bhima Yudhistira assessed that the projections of the government and Bank Indonesia tied to national economic growth in 2021 could be achieved or not, depending on the last two quarters of this year.

"The third and fourth quarters are very decisive (whether the government's target can be achieved or not)," he said when contacted by VOI, Tuesday, July 13.