Indef Forecast: The COVID-19 Pandemic Is Lost, The Economy Does Not Recover Automatically

Illustrated. (Achmad Basarrudin / YOU)

JAKARTA - Institute for Development of Economics and Finance (INDEF) senior economist Enny Sri Hartati said that a long process was needed to restore economic conditions to normal. The economy can recover if the government succeeds in overcoming the main problem, namely the COVID-19 pandemic.

However, Enny emphasized that when the COVID-19 pandemic ends, economic performance will not automatically recover.

"Make no mistake, the process of economic recovery is not as easy as reversing the palm of the hand. So it still takes a process to restore the economy (as it was) before it," he said, during a virtual discussion entitled 'Vaccines and Prospects for Economic Recovery', Saturday, December 19.

Furthermore, Enny said, this was because the impact of the COVID-19 pandemic was so massive and systemic in hitting the performance of the national economy since the beginning of this year. In fact, due to the pandemic, many businesses closed and layoffs occurred.

"Where there are additional new unemployment due to the COVID-19 pandemic of 2.56 million. Then many millions of workers have experienced a decline in income, reduced working hours, so many people have switched to work to the informal sector," he said.

The increase in unemployment rate, said Enny, also had an impact on the level of household consumption which decreased drastically during the COVID-19 pandemic. In fact, this sector has been able to become the backbone of the national economy.

"The level of economic dependence on household consumption reaches 58 percent," he said.

According to Enny, the government needs to implement policies that are not only extra ordinary. But also able to consolidate various programs in a concrete manner. One of them is to stimulate the expansion of job creation to increase household consumption.

"Because the data on the impact of the pandemic on unemployment is extraordinary. People need to have a large number of jobs," he explained.