Jakarta: Bank Indonesia (BI) has revealed that national economic growth in Indonesia is projected in the 0.9-1.9 percent range for 2020 before rebounding to 5.0-6.0 percent in 2021 on the back of global economic gains as well as policy stimuli introduced by the government and the central bank.
According to BI Governor Perry Warjiyo, national economic growth is still expected to decline in the second quarter of 2020, although the latest developments indicate milder pressures.
"Exports are shrinking on global economic contraction, while household consumption and investment are decreasing due to large-scale social restrictions that have curbed economic activity," the BI Governor said here on Thursday, June 18, 2020.
Developments in May 2020 pointed to incipient signs of less pressure on the domestic economy. The export contraction was not as deep as previously projected in line with increasing demand from China.
Furthermore, the economy has reached its lowest level and is now entering a recovery phase, as confirmed by cement sales, retail sales, PMI and improving consumer expectations. BI expects the economic recovery process to gain momentum in the third quarter of 2020 after the government relaxes large-scale social restrictions (PSBB) in the middle of June 2020, coupled with the policy stimuli already implemented.
Moving forward, the central bank will continue to strengthen synergy with the government and other relevant authorities to ensure policy effectiveness in terms of driving the economic recovery during and after covid-19.