Indonesia’s Economy to Grow 0.1 Percent This Year, Says Economist

JAKARTA, KOMPAS.com – The Indonesia economy is projected to grow at 0.1 percent throughout the year in the wake of the Covid-19 pandemic, an expert said June 18.

PT CIMB Niaga Chief Economist Adrian Panggabean projected a contraction in the second quarter followed by a slow trek back to positive territory in the third and fourth quarter of the year.

“We had internally projected a contraction of 3 percent in the second quarter. But a new data just showed a contraction of 5 percent,” said Adrian during a Marketeers Hangout webinar titled “Indonesia Economic Outlook Update.”

Adrian said the economy will grow at 2 percent in the fourth quarter. But overall, the country’s economy grows at 0.1 percent.

“This is estimated between being optimistic and pessimistic. The International Monetary Fund (IMF) has projected 0.5 percent [growth for Indonesia] throughout 2020, but the World Bank has just revised it to minus,” he said.

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He further added that uncertainty remains high and it will depend on the second wave of coronavirus or whether the implementation of large scale social restrictions (PSBB) measures will continue to contain the virus from spreading.

As Indonesia has begun easing the PSBB, the number of confirmed cases has reached over 41,000, the highest among the Association of Southeast Asian Nations (ASEAN) member states.

The economy will also be affected by the pace of recovery, which varies in each country. 

According to data on Covid-19 transmission, economic conditions, and policy position, some countries such as South Korea, Taiwan, China, and Vietnam can be categorized as leaders, while Malaysia and Japan can be the followers.