Indonesia’s Economy to Grow 4,9% This Year, OECD Predicts

Minister of Finance Sri Mulyani Indrawati (19/03/2021). (Photo source: Official Website of Ministry of Finance)

The Organization for Economic Co-operation and Development (OECD) has reported that Indonesia’s economy is forecast to grow in the range of 4,9 percent this year.

Based on that estimation, the growth is projected to increase by 5,4 percent next year.

OECD Secretary General Angel Gurria on OECD Economic Review of Indonesia 2021 (18/03) said that Indonesia’s economic recovery following the pandemic will gradually be under way and hinge on handling of the health sector.

“Indonesia is now facing its toughest challenge since the 1997 financial crisis. With the right reforms, the country can harness the energy and talents of their young population and move its  economy forward,” Angel said.

In the meantime, Indonesian Minister of Finance Sri Mulyani Indrawati explained the measures taken by the Government in dealing with extraordinary situation amid the COVID 19 pandemic, one of which is fiscal and monetary policy relaxation.

The Government, she said, has relaxed fiscal and monetary policies by widening the deficit to 6,09 percent of the gross domestic product (GDP) in 2020.

“I think this (the deficit) is relatively low compared to that of other OECD countries. We experienced deficit in 2020 of around 6,1 percent and at the same time the economic condition was also relatively good and the contraction was around two percent. That is one of the achievements that we use to respond to the situation in 2021,” she said.

The Minister also pointed out that the Government’s spending is focused on the handling of the COVID-19 pandemic, especially in health sector, social protection, and maintaining the sustainability of the business sector.

With the Government’s proper and fast responses, Indonesia’s poverty rate stays at around 10,4 percent – lower than the World Bank’s prediction of above 11,4 percent, she added.

“Now we really need to focus on how to make the recovery process continue. At the same time, we will also boost this recovery process and monitor areas that need more policy supports. This is very pragmatic, but also flexible, transparent and accountable,” she remarked. (PR of Ministry of Finance/UN) (AP/EP)