Indonesian Government Eyes Economic Rebound in 2023

JAKARTA, KOMPAS.com – The Indonesian government is eyeing an economic recovery in 2022 or 2023 that restores growth rates to levels before the Covid-19 pandemic.

The announcement was made by the Indonesian Coordinating Ministry of Economic Affairs on June 9.

The Special Advisor to the Coordinating Economic Minister, Raden Pardede, expects the economy to rebound to around 5 percent in 2023.

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The ministry needed to set an economic target in designing the policy to stimulate growth, he said during a video conference on June 9. "In 2022 or 2023, we should at least return to 5 percent growth.” 

The pandemic has battered the Indonesian economy, with growth slowing down to 2.97 percent in the first quarter of 2020.

During the same period last year, the Indonesian economy grew 5.07 while in the fourth quarter, it grew 4.97 percent.

Raden said he expected the Indonesian economy to have hit the negative zone in the second quarter this year as pressure from the pandemic built up.

Read Also: Indonesian Economy Projected to Shrink 3.9 percent If Second Wave Hits

Bank Indonesia Governor Perry Warjiyo has predicted the Indonesian economy to grow below 2.3 percent for all of 2020.

The slowdown of the Indonesian economy mirrors the trend in Asia. Singapore's economy is contracting 2.2 percent and South Korea is growing at only 1.3. 

Nonetheless, Raden expressed optimism that by 2023, the Indonesian government will be able to power the country’s economic performance.

The hope is that poverty and unemployment rates that worsened during the pandemic will eventually return to levels before Covid-19.

“If possible, job creation will also return to pre-Covid-19 levels that would create 1.5-2 million new jobs. The poverty rate must also return to 9 percent. As we all know, poverty and unemployment rates will skyrocket for the time being,” said Raden.

Coronavirus management aid

The central government together with related authorities have rolled out several policies, fiscal and monetary, to salvage the Indonesia economy.

Funding for Covid-19 management has been increased to Rp 677.2 trillion from Rp 405.1 trillion.

Read Also: WHO Releases Indonesia Coronavirus Report

As a result, the State Budget has grown by Rp 272.1 trillion or 67 percent.

Approximately Rp 87.55 trillion of the coronavirus management aid has been allocated to the healthcare sector.

Social welfare and protection programs have been allocated Rp 203,9 trillion.

Small and medium enterprises have been allocated Rp 123.46 trillion in aid while the business community is poised to receive Rp 120.61 trillion in financial aid.

(Writer: Mutia Fauzia | Editor: Bambang P. Jatmiko) 

Source: https://money.kompas.com/read/2020/06/09/164419926/pemerintah-targetkan-2023-ekonomi-ri-bisa-kembali-tumbuh-5-persen