Despite The COVID-19 Pandemic, Indonesia's Economic Growth In 2020 Is Predicted To Be 1.5 Percent

BNI Central Building. (Angga Nugraha / VOI)

JAKARTA - Chief Economist of PT Bank Negara Indonesia (Persero) Tbk (BNI) Ryan Kiryanto predicts Indonesia's economic growth throughout 2020 will be in the range of 0.5-1.5 percent. This projection is still better than the World Bank, which estimates that Indonesia's economy will be minus 3.51 percent this year.

"Almost all world institutions predict that Indonesia's economic growth in 2020 will be bad. At worst minus 3.51 percent is from the World Bank. At best, the IMF estimates Indonesia's economic growth at 0.5 percent and the Asia Development Bank (ADB) predicts 2.5 percent," said Ryan.

Meanwhile, Ryan continued, preferring to estimate Indonesia's economic growth this year in the range of 0.5 to 1.5 percent. Ryan revealed that he has his own reasons why he does not set a point to predict the country's economic growth in 2020.

"Why not drop 0.5 or 1.5 percent? Because we don't know the dynamics in the next six months or nine months, whether COVID-19 will be completed this year or if it will be prolonged. Nobody knows, so we estimate it will be in that range," he concluded .

Previously, Bank Indonesia (BI) stated that the COVID-19 pandemic hit the country's economy this year. However, BI is optimistic that in 2021 there will be significant improvements.

Governor of Bank Indonesia, Perry Warjiyo, said that Indonesia's economy could still grow 2.3 percent in 2020. The details, growth in the first quarter, 4.3 percent. Then, in the second quarter it contracted to 0.4 percent. Meanwhile, in the third quarter it is estimated that it will reach 1.2 percent, and in the fourth quarter it has increased by 3.1 percent.

Well, he estimates that Indonesia's economic growth in 2021 will be in the range of 6.6 percent to 7.1 percent. One of them, because it is supported by a large fiscal stimulus from the government.

Perry explained that the economic growth was assuming a budget deficit of only 3.4 percent of Gross Domestic Product (GDP). If the fiscal stimulus is around 3.1 percent of GDP, the growth could reach 6.6 percent.

However, if the fiscal stimulus is 4 percent of GDP, economic growth is projected to reach 7.1 percent, "said Perry.