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Global Economy Could Return to Positive Growth Next Year Despite Covid-19 Pandemic, Says Indonesian Minister

December 22, 2020, 05.24 PM

JAKARTA, – Indonesia’s Finance Minister Sri Mulyani Indrawati said that the global economy could recover and return to positive growth next year despite the Covid-19 pandemic which has caused a severe slowdown.

“Next year, [global economic growth] will rebound though the economy remains to be haunted by the Covid-19 pandemic,” said Sri Mulyani during a virtual event on the 2021 Indonesia Economic Outlook on Tuesday, December 22.

Sri Mulyani said the global economy this year is estimated to shrink by four to five percent, the sharpest global economic contraction since the Great Depression.

Also readOptimism Grows for Rebound of Indonesian Economy, Boosted by Vaccine Hopes

“Certainly, this is a great shock and must be managed by all countries in the world,” she said.
The minister added that vaccine effectiveness is the key to restoring economic activity and fueling global economic growth. It is hoped that the global economy could grow again from four to five percent next year, she said in her outlook.

She said the drive for the global economy comes from developing countries, including Indonesia. Fiscal policy instruments, she added, are among ways for a country to deal with the pandemic that has caused multiple crises in the health, social, and economic sector.

Also readIndonesian Economy Could Rebound to 6% in 2021 Under Certain Conditions

The Indonesian government has allocated a budget of 695.2 trillion rupiahs ($49.4 billion) for handling the Covid-19 pandemic in 2020. Meanwhile, the minister said, the government has also set a budget for handling the Covid-19 and national economic recovery next year at 356.5 trillion rupiahs ($25.3 billion).

“Together with BI [Bank Indonesia] the government will maintain the country’s economic stability in fiscal and monetary instruments from the threat of an economic downturn,” she said, adding that the government will find ways to recover from the fiscal side while carrying out deficit financing.

(Writer: Mutia Fauzia | Editor: Erlangga Djumena)


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