Indonesia Experiences Recession, Economist: Economy in the Fourth Quarter Will Still be Negative
LiputanIslam.com— Indonesia has experienced a recession because its economy for two consecutive quarters grew negatively, -5.32 percent in the second quarter and -3.49 percent in the third quarter of 2020. There was an improvement on a quarterly basis even though it was still negative.
Presidential Executive Staff Arif Budimanta revealed that the economic recovery was currently underway by channeling the government budget. He was optimistic that economic growth in the next quarter would be better.
“In the fourth quarter, the remaining budget will continue to be distributed to stimulate the economy. We are optimistic that the economic recovery will be on the right track, “he said.
However, Bank UOB Indonesia economist Enrico Tanuwidjaja predicts that Indonesia’s economy will still grow negatively in the fourth quarter at -0.30 percent.
This prediction is based on the level of mobility of people and the development of COVID-19. The implementation of large-scale social restrictions (PSBB) that will still be enforced will hamper the mobility of people so that it will affect the wheels of the economy.
According to him, Indonesia’s economy will only grow positively in the first quarter of next year. This will be driven by the availability of vaccines, adaptability in the midst of a pandemic, and public consumption.
“We hope that the Indonesian economy can return to a positive growth zone in the first quarter of 2021, leading to an annual growth of 4.3 percent on a full-year basis,” he said, Friday (6/11).
However, the pace of economic recovery is still filled with uncertainty. This is because economic performance is largely determined by the level of COVID-19 transmission and enforcement of health protocols throughout Indonesia.
Judging from the level of the spread of COVID-19, there are several downside risks to economic recovery. Based on UOB data, there has been an increase in daily cases since last October. This means that the transmission still has the potential to continue.
In addition, the acceleration depends on the effectiveness of the disbursement of funds from the National Economic Recovery Program (PEN) and the tendency of people to spend it. (sh/republika /cnbcindonesia)