Indonesian Economy Projected to Shrink 3.9 percent If Second Wave Hits

JAKARTA, KOMPAS.com – The Organization for Economic Cooperation and Development (OECD) warns that the Indonesian economy could contract by 2.8 to 3.9 percent if the country experiences a second wave of Coronavirus infections.

The figure is lower than estimates made by the Indonesian government which expects the economy to contract by only 0.4 percent.

Under the worst-case scenario, the Indonesian economy is predicted to grow by 2.4 percent.

Also Read: Indonesia Coronavirus Cases Break Three Records in One Week

OECD’s Chief Economist Laurence Boones explained that there are two possible scenarios in which each is based upon the Indonesian government’s management of the Coronavirus pandemic.

As of 11 June, Indonesia's Coronavirus cases have surpassed 35,000 confirmed cases while daily new infections have steadily increased.

This comes amidst the Indonesian government’s push for more aggressive testing and contact tracing.

Previously, President Joko Widodo (Jokowi) strived to meet 10,000 daily tests but has recently doubled the daily testing rate.

Also Read: Indonesia’s Coronavirus Death Toll Now At 2000

Should Indonesia avoid the second wave of infections, then the first scenario projects the Indonesian economy to contract 2.8 percent with domestic consumption shrinking by 3.1 percent.