The World Bank has predicted that Indonesia’s economic growth figures for 2020 will contract between 1.6% and 2%.
This projection is worse than the consensus made in June that said that the statistics would be neutral.
The World Bank noted that Indonesia’s economic contraction will occur because the handling of the pandemic has not been effective in the country.
Aaditya Mattoo, the chief economist for East Asia and Pacific said that the Indonesian government has not succeeded in overcoming the COVID-19 pandemic. According to him, Indonesia is one of the countries in the Asia Pacific region that isn’t showing any signs of economic recovery in the near future.
“Indonesia has not implemented strict isolation and seems to rely more on lighter policies,” he said on Tuesday 29th September.
The World Bank predicts that Indonesia’s economic recovery will be slower than other countries in the Asia Pacific region, including countries such as the Philippines which has started to recover despite the pressure of a global pandemic.
Mattoo said that to maintain the stability of Indonesia’s economy this year, the government needs to carry out fiscal reforms and increase expenditure. It is a stimulus for social protection and welfare.