Anticipate Possible Second Wave of Pandemic, Global Economic Uncertainties: President Jokowi
Date 28 Juli 2020
Global economy is developing very dynamically and full of uncertainties, according to President Joko “Jokowi” Widodo.
He also said that several world financial institutions constantly revise projection for this year’s global economic growth and next year’s growth projection.
“The International Monetary Fund (IMF), the World Bank, and the Organization for Economic Cooperation and Development (OECD) predict that the economy will see a positive growth next year and even the IMF predicts that the world economy will grow by 5.4%,” the President said during a limited meeting on the 2021 State Budget Bill through a video conference from the Bogor Presidential Palace, West Java Province, Tuesday (28/7).
The IMF’s estimate, the President continued, is very high because the World Bank’s projection is only 4.2%, the OECD between 2.8% and 5.2% and if this estimate is correct, Indonesia’s economy should also be above that of the global economic growth.
“Indonesia is also projected to enter the group with the fastest economic recovery after China. If this projection is correct, I think we should be grateful,” he said, adding that Indonesia must remain vigilant regarding possibility and anticipation of the risk of a second wave of the pandemic and continued uncertainty of global economy next year.
The President also pointed out that macroeconomic indicator numbers must be carefully and thoroughly calculated by taking into account the latest developments and projections.
“We also need to ensure priorities for next year and the widening deficit for the 2021 State Budget which is focused on financing activities to speed up economic recovery and at the same time to strengthen transformation in various sectors, particularly reforms in health, food, energy, and education sectors and also acceleration of digital transformation,” he said.
The Head of State also pointed out that the State Budget only contributes approximately 14.5% to the country’s gross domestic product (GDP); therefore, he noted that amidst the ongoing crisis, government spending becomes the main instrument to rebuild the economy.
“The State Budget which is right on target will leverage the private sectors and micro, small, and medium enterprises (MSMEs),” he said, adding that we should not forget the country’s big and strategic agendas, particularly in efforts to get out of the middle-income trap amid this difficult situation.
“As you may be aware, as of 1 July Indonesia is now officially an upper-middle-income country. However, we’re also aware that it is a long way to go to get out of the middle-income trap,” he said. (TGH/EN)
Reviewed by: M. Ersan Pamungkas