Jakarta: Indonesia has responded with a bold, comprehensive, and coordinated policy package to address the socio-economic hardship inflicted by the covid?19 pandemic, according to an International Monetary Fund (IMF) team.
An IMF team led by Thomas Helbling conducted virtual discussions on the Indonesian economy for the 2020 Article IV Consultation from November 25 to December 11.
The team exchanged views with officials in the government, Bank Indonesia (BI), Financial Services Authority (OJK), other public agencies and representatives of the private sector.
"The outlook is positive. Building on the economic rebound in the second half of 2020, real GDP is projected to expand by 4.8 percent in 2021 and 6 percent in 2022, led by strong policy support measures, including covid?19 vaccine distribution plans as well as improved global economic and financial conditions," Helbling said in a statement on Thursday.
"The uncertainty surrounding the growth outlook is larger than usual. Early widespread vaccination is an upside risk, while delays could lead to a more protracted pandemic, a downside risk. The macro-financial fallout of the pandemic and economic downturn could be larger-than-expected, and credit conditions could be slow to improve," he stated.
According to Helbling, to secure the ongoing recovery, sufficient policy support will be essential.
"The accommodative macroeconomic policy mix expected in 2021 is thus welcome. For the medium term, restoring the macroeconomic policy framework (e.g., 3 percent of GDP budget deficit target) that has been appropriately and temporally suspended during the pandemic will reinforce Indonesia’s prudent policy track record. A detailed fiscal strategy backed by revenue?boosting measures would help in managing the balancing act," Helbling stated.