JAKARTA, Oct 12, 2020, ANTARA. Indonesia’s economic recovery began in the 2020 third quarter (Q3) owing to government spending on the National Economic Recovery (PEN) Program, including for health, social assistance, and MSME support, Finance Minister Sri Mulyani Indrawati stated, ANTARA reported.
“It has begun recovering and will get stronger in the fourth quarter,” Indrawati noted during a virtual Financial Profession Expo here on Monday.
The country’s economic growth is projected to remain in the negative territory in Q3 of 2020 though better than the contraction of 5.32 percent in the second quarter.
At the state budget press conference on Tuesday (Sept 22), the minister projected that Indonesia’s economy in Q3 of 2020 will post a contraction in the range of one to 2.8 percent.
A contraction by 0.6 percent to 1.7 percent is expected for this year as a whole.
This projection aligns with those made by other international financial institutions, including the International Monetary Fund (IMF) that estimated Indonesia’s economy to grow negatively by 0.3 percent in 2020. The World Bank projected a contraction of 1.6 to two percent, while the Asian Development Bank (ADB) forecast a contraction of one percent.
Meanwhile, other neighboring countries in Southeast Asia, such as Malaysia, Singapore, Thailand, and the Philippines, recorded a deeper contraction as compared to Indonesia, Indrawati pointed out.
“Hence, we will continue to work with all our tools, including fiscal, to boost our resilience and also to recover quickly,” she affirmed.
The government has budgeted a ceiling of Rp695.2 trillion for the handling of COVID-19 and the National Economic Recovery (PC-PEN) Program that pushed the 2020 State Budget deficit by 6.34 percent.
The National Economic Recovery and Transformation Task Force had earlier stated that from the PC-PEN budget ceiling, Rp318.5 trillion, or 45.8 percent, had been disbursed by the end of September 2020.
Six groups of budget expenditures allocated include for the health program, with a disbursement of Rp21.9 trillion, or 25 percent of the ceiling of Rp87.55 trillion.