Sri Mulyani: The Contraction Of The World Economy Is Not Deep, Only India Can Minus 23.9 Percent

Minister of Finance, Sri Mulyani. (Irfan Meidianto / VOI)

JAKARTA - Finance Minister Sri Mulyani said that based on data from the International Monetary Fund (IMF) and the World Bank, the latest projections show that world economic contraction is not as deep as predicted. This is reflected in global economic growth.

"The IMF will issue their latest projections. The last update from the IMF is that in 2020 the contraction was not as deep as predicted in June and the contraction was estimated to be minus 5.2 percent. The outlook issued this October was that the world economic contraction was lower, namely minus 4.4. percent, "he said, in the September Realization Period State Budget Report Conference, Monday, 19 October.

The airport of this country said that the revision of the projection carried out by the IMF illustrates the conditions in several regions, especially in developed countries where there is currently a faster global economic recovery.

Furthermore, Sri Mulyani said, a faster recovery from developed countries is expected to occur in the third quarter of 2020, even though previously in the second quarter the contraction was very deep, touching double digits.

"In the last month I showed contractions in all countries, especially developed countries. In addition, even developing countries experienced very, very deep contractions," he explained.

Meanwhile, said Sri Mulyani , The Organization for Economic Co-operation and Development (OECD) also revised world economic growth last September with projections in 2020 minus 4.5 percent.

On the other hand, the World Bank still predicted that last June the world economy contracted 5.2 percent and even if there is a revision it will be carried out at the beginning of the year.

"If we look at this year, there is a slight convergence of the world economic outlook of these various institutions, namely in the range between minus 4 percent to 5 percent," he said.

India Most Depressed by COVID-19

The COVID-19 pandemic, said Sri Mulyani, has destroyed the economies of all countries in the world without exception. However, the one most severely affected by the pandemic was India.

Sri Mulyani said, among the emerging market countries that contracted the most is India. Where in the second quarter of 2020 the economic contraction even reached minus 23.9 percent and will continue in the third quarter minus 6.6 percent.

Furthermore, Sri Mulyani said, under the latest IMF report, India's economy this year is projected to be minus above 10 percent. This is considered as a big contraction for developing countries.

" Emerging countries like India are experiencing the most devastating contraction. It is extraordinary in" he said.

Meanwhile, said Sri Mulyani , countries around Indonesia, such as Malaysia, contracted in the second quarter, namely minus 17.1 percent and in the third quarter the projected minus 4.5 percent. Then the Philippines minus 16.5 percent in the third quarter is predicted to be minus 6.3 percent. Then, Singapore is minus 13.2 in the second quarter and minus 6 percent in the third quarter.

Thailand is minus 12.2 percent and in the third quarter it will remain minus 9.3 percent. However, Sri said, with the current political conditions in Thailand, even in the fourth quarter it is considered that it will be difficult to get up.

"So all countries across the board, whether in the West, East, North, South, developed or emerging , all experience tremendous pressure. We'll see the magnitude of the different pressures," he said.