Jakarta: The International Monetary Fund (IMF) predicted on Tuesday that the Indonesian economy will contract by 1.5 percent in 2020, a more severe contraction than it forecast in June.
"All emerging market and developing economy regions are expected to contract this year, including notably emerging Asia, where large economies, such as India and Indonesia, continue to try to bring the pandemic under control," said the IMF in its October 2020 World Economic Outlook (WEO) report.
Meanwhile, Global growth is projected at −4.4 percent in 2020, a less severe contraction than
forecast in the June 2020 WEO Update.
However, global growth is projected at 5.2 percent in 2021, a little lower than in the June 2020 WEO Update, reflecting the more moderate downturn projected for 2020 and consistent with expectations of persistent social distancing.
After the rebound in 2021, global growth is expected to gradually slow to about 3.5 percent into the medium term.
This implies only limited progress toward catching up to the path of economic activity for 2020–25 projected before the pandemic for both advanced and emerging market and developing economies.
It is also a severe setback to the projected improvement in average living standards across all country groups.
"The pandemic will reverse the progress made since the 1990s in reducing global poverty and will increase inequality," it stated.