Jakarta: Finance Minister Sri Mulyani Indrawati opined that Indonesia's economic growth will hinge on the policy to extend large-scale social restrictions (PSBB) in several regions.
The enactment of social distancing measures in the capital city Jakarta since March has impeded economic growth in the first quarter of 2020 to reach 2.97 percent, or contracting 2.41 percent, from 5.07 percent during the corresponding period of 2019, Sri Mulyani stated here on Wednesday, May 6, 2020.
"We can imagine in April and May when the PSBB was imposed massively, then consumption will drop deeper," she noted during a working meeting with Commission XI of the House of Representatives.
Sri Mulyani remarked that the enforcement of social distancing measures had caused public consumption to plunge to 2.84 percent in the first quarter of 2020, far below the average growth at five percent.
Public consumption was an important contributor to the country's economic growth, at 57 percent. Public consumption in Jakarta and other provinces in Java Island contributed some 50 to 55 percent to the total consumption in Indonesia, she pointed out.
"Jakarta and Java Island contributed over 50-55 percent, thereby translating to the fact that consumption will not witness a growth with the imposition of PSBB in Jakarta and Java," Sri Mulyani explained.
Hence, the minister has forecast Indonesia's economic growth to decline to minus 0.4 percent in the worst-case scenario if the covid-19 pandemic was not overcome until the second and third quarter of the year.
"If until the second and third quarter, we cannot cope with the pandemic, this will have a longer impact wherein we will enter the worst-case scenario," he added. (antara)