Finance Minister Expects Indonesian Economy to Grow 0.5 percent in Q3

JAKARTA, KOMPAS.com – Indonesia looks forward to lifting the economy out of the doldrums in the third quarter with the help of the economic stimulus package launched in response to the Covid-19 crisis, the government said on August 5.

“In the third quarter, we expect the growth to be at least 0 percent and positive 0.5 percent,” Finance Minister Sri Mulyani Indrawati told reporters in a virtual press conference.

The Southeast Asian country is reeling from a deeper-than-expected contraction in the second quarter owing to the impact of the pandemic that halted much of its economic activity.

Though there is still a probability of negative economic growth in July-September as the decline in various sectors cannot instantly recover, Sri Mulyani hoped the economy would recover in the third and fourth quarter of 2020.

Also read: Businesses Could Face Fines for Flouting Covid-19 Health Protocols in Indonesia

Previously, the Central Statistics Agency (BPS) announced that the economy contracted 5.32 percent year on year in the second quarter due to the coronavirus.

This, Sri Mulyani said, gave the government the impetus to put in place various policies to survive the effect of the Covid-19 pandemic. This includes the exemption from electricity charges for business and social customers.

The government is also working on other policies such as adding more recipients for social assistance programs and providing financial assistance to employees of the private sector who earn a monthly income of below 5 million rupiahs ($345), she added.

Also read: Indonesia’s Economy Contracts 5.32 Percent, Says Central Statistics Agency

Sri Mulyani hopes that by taking such steps, economic growth in the third quarter and the fourth quarter will bounce to positive territory.

The economy in the last quarter of this year is expected to grow by about three percent.

“If this will be achieved, the overall economic growth in 2020 is expected to reach a minimum of zero to one percent,” she said.

The government has taken some measures, including allocating 607.5 trillion rupiahs ($42 billion) under the national economic recovery program to counteract the disruption caused by the current pandemic.

(Writer: Rully R. Ramli | Editor: Bambang P. Jatmiko)

Source: https://money.kompas.com/read/2020/08/06/051700126/sri-mulyani-berharap-ekonomi-ri-bisa-tumbuh-05-persen-di-kuartal-iii.