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Indonesian Economy Could Rebound to 6% in 2021 Under Certain Conditions

November 23, 2020, 07.59 PM

JAKARTA, – The Indonesian economy could rebound to a 6 percent growth in 2021 if certain conditions are met, said the Centre of Reform on Economics (CORE).

CORE projects that the Indonesian economy could see a growth of 3-6 percent next year though its feasibility depends on the fulfillment of several criteria.

CORE explains that an economic rebound could happen in 2021 if the number of Covid-19 infections gradually and consistently reduce.

The second aspect is on Covid-19 vaccine distribution that is successful and is made accessible to the public by the second semester of next year.

Read also: Indonesia to Follow Global Standards for Safe Covid-19 Vaccine Distribution

The national economic recovery would also be bolstered if the Indonesian society is able to adapt to the pandemic and if there is improved public trust.

These aspects are especially important for the middle to upper-class whose purchasing power could bolster the national economy and support a swifter recovery.

“The condition would also need to be supported by government policies that are rapid and effective, and ones which are not solely focused on the short term. What is needed are policy breakthroughs to spur reforms and economic transformations for a strong and resilient recovery.”

CORE’s assessment puts the Indonesian economy hovering at around 3 percent in 2021 if the number of Covid-19 cases dwindle down by the end of 2020 and should the country experience a second wave of infections next year.

Read also: Indonesia Faces Recession as Economy Shrinks 3.49 Percent in Q3

Should the process of Covid-19 vaccine distribution be carried out slowly and is not made accessible by the second semester of 2021 then the Indonesian government is likely to see its economy recover at around 3 percent.

Similarly, if the middle to upper-class societies of the country lack trust thus creating weaker purchasing power, then CORE expects this to limit Indonesia's economic rebound.

Slow and ineffective implementation of the government’s National Economic Recover program would also slow down any efforts of a rebound.

Read also: Up to 13M Jobless Estimated in Revised Outlook on Indonesian Labor Force

“The span of growth potential cannot be separated from the complexities of factors that determine how far the expansion of the Indonesian economy will reach next year. The condition is very different than the economic patterns shown pre-pandemic which were relatively stable.”

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


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