Luhut Pandjaitan: Indonesia Has The Opportunity To Enter The Gap Of A Recession In The Third Quarter Of 2020

Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan. (Photo: Instagram @ luhut, pandjaitan)

JAKARTA - Singapore experienced an economic contraction that worsened in the second quarter, causing a recession. Then most recently, Britain also officially entered the brink of recession.

A number of countries are now wary of the same thing. Is Indonesia the next country?

Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan said there was a possibility that Indonesia would fall into the brink of recession in the third quarter. However, his party is trying hard to prevent Indonesia from experiencing a recession following Britain.

"The possibility of a recession is there, but we also have to be optimistic. If it is now minus 5.32 percent, now we are really working hard, if possible it will be zero or grow 0.5 percent," he said, at the APINDO National Rakerkonas Working Meeting and Consultation. 2020, Jakarta, Thursday, August 13.

As is known, in the second quarter of this year Indonesia's economic growth contracted or minus 5.32 percent. Indonesia will be declared entering the brink of recession if it experiences minus for two consecutive quarters or more. This means that if the third quarter of 2020 minus occurs again, then Indonesia is officially a recession.

Luhut said there were three steps the government could take to free Indonesia from recession, namely the use of the state budget, stimulus, and the desire of local investors to invest.

Furthermore, Luhut hoped that domestic entrepreneurs would not hesitate to invest in the country. Because in this way, Indonesia can follow in the footsteps of China that escaped recession.

"APBN, stimulus, domestic investors. Do not hesitate, if there is a problem, tell us, we will definitely help," he said.

Luhut admitted that he was still confident that the future recovery trend would be better. This is because, in terms of foreign direct investment (FDI), the figure is still quite high. He also said that one of the investors had even announced the latest investment in the development of electric batteries worth 2.6 billion US dollars.

"So I am very confident that we will continue to get better in the future. If someone is not confident, I think it might hurt a little too," he said.

Meanwhile, Luhut also claimed that the average number of recovered COVID-19 patients had reached 65 percent. The cure rate in Bali, which tourism has recently reopened, has even reached 85 percent.

"The vitality rate has fallen to 4.5 percent. I see this is a good figure. Because the economic recovery and the handling of the pandemic must go hand in hand," he said.