Jakarta: Bank Indonesia (BI) senior deputy governor Destry Damayanti has warned that the Indonesian economy may contract by 4.8 percent in the second quarter of 2020.
"The Finance Ministry expects a contraction of around four percent in the second quarter of 2020. Our projection is quite similar. Between 4 and 4.8 percent," the BI official said during a video conference here on Monday.
However, the latest developments in June 2020 showed early signs of economic recovery in line with the gradual easing of large-scale social restrictions.
Early indicators of domestic demand regained some upward momentum, including retail sales, the Purchasing Managers Index, consumer expectations and other domestic indicators.
Exports of several commodities also improved in June 2020, including iron and steel, boosted by demand from China for infrastructure projects.
Moving forward, the pace of domestic economic recovery is expected to accelerate with the absorption of fiscal stimuli, successful loan and corporate restructuring, the digitalisation of economic activities, including MSME activity, as well as the effective implementation of health protocols in the new normal era.
Through its policy mix, the central bank continuously strengthens synergy with the Government and other relevant authorities to ensure the policies taken effectively drive the economic recovery.