Workers at a Light Rail Transit (LRT) construction in Jakarta during large-scale social restriction (PSBB) on Monday. (Antara Photo/Rivan Awal Lingga)

Sharp Correction to Indonesia's Economic Growth Expected as Global Recession Looms

BY :NOVY LUMANAUW, LENNY TRISTIA TAMBUN

APRIL 14, 2020

Jakarta. President Joko "Jokowi" Widodo said on Tuesday the economic impact from the Covid-19 pandemic has the potential to trigger a global recession in 2020, and economic growth in Indonesia is likely to see a sharp correction.

"According to the latest numbers that I received, the global economy will decline by minus 2.8 percent, which means it can go as low as minus 6 percent," Jokowi said during a limited cabinet meeting at the Merdeka Palace in Jakarta.

Several international institutions, including the International Monetary Fund (IMF) and the World Bank, have predicted that global economic growth in 2020 will enter a period of recession. 

Previously, Finance Minister Sri Mulyani estimated economic growth in the country this year would only reach 2.3 percent, far below the pre-pandemic forecast of 5 percent.

"This situation is not only occurring in Indonesia but also in other countries," Jokowi said. 

However, he stressed that the government is preparing itself for a number of different scenarios and must be optimistic.

"We must continue to work hard in the recovery efforts [from the pandemic], both in terms of public health and economically," Jokowi said.

The president said ministries and government institutions must remain focused on their original mission to accelerate bureaucratic and structural reforms.

He said the government must prepare for continued impact from the Covid-19 pandemic on Indonesia's economic growth in 2021.

"We must remain vigilant on the continued impact of Covid-19 on our economy in 2021. We must calculate all the potentials, opportunities, as well as risks, both domestically and globally," the president said. 

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