Jakarta: Finance Minister Sri Mulyani Indrawati has revealed that the government is yet to take a decision on revising its economic growth forecast of 5.3 percent for this year despite global slowdown over the spread of coronavirus.
"We will first look at its impact on our economy. Of course, it will affect China's GDP," the minister noted at a press conference in Jakarta on Wednesday, February 19, 2020.
She explained that the coronavirus outbreak may impact the global economy since China, the world's second-largest economy after the US, contributes 17 percent of the global gross domestic product (GDP).
According to her, China has made utmost efforts to prevent the spread of coronavirus by restricting the mobility of its citizens in a way that the coronavirus outbreak can be kept under control and not reach pandemic status.
She has forecast that China will likely adopt a "countercyclical policy" through fiscal and credit expansion to facilitate economic recovery in the second or third quarters of 2020.
"We will look at it in this first quarter and thereafter there will normally be a stimulus from China. Its impact was extraordinary when they adopted a countercyclical policy in 2008," she pointed out.
With projected improvement in China's economy, the minister believes the global economic performance can still be kept under control. Moreover, the Indonesian government has prepared a budget stimulus to maintain the domestic condition.
"We should neither underestimate it nor should we be too pessimistic," the former World Bank managing director remarked. (Antara)