International Monetary Fund (IMF) sees Indonesia' economic growth only 0.5 percent in this year, the lowest level since 1998, caused the impact of the pandemic - Photo by President Office

JAKARTA (TheInsiderStories) – International Monetary Fund (IMF) sees Indonesia’ economic growth only 0.5 percent in this year, the lowest level since 1998, caused the impact of COVID-19. Last January, the agency still looking the Southeast Asia largest economy prospect 4.8 percent of gross domestic products (GDP).

Compared to other countries in the region, said the Fund, Indonesia is still fortunate because Thailand’ economy is estimating shrinking to minus 6.7 percent, Singapore drops to  minus 4 percent, and Malaysia contraction to 1.7 percent. Thailand’ economy was hit badly because dependence on the tourism sector.

“Developing countries such as China, Indonesia and South Africa have begun rolling out large amounts of fiscal stimulus to help businesses and workers affected by the corona virus pandemic. However, this fiscal attitude still needs to be enlarged if economic slowdown worsens,” said the report.

Last year, IMF said Indonesia’s GDP was expected to expand just 5 percent this year — down 0.2 percentage points from its April projection — and will rebound to 5.1 percent in 2021, or down 0.1 percentage points from an earlier forecast.

Finance minister, Sri Mulyani Indrawati has announced that Indonesia’ economic growth could contraction to 2.3 percent in this year. Initially the government targeting the GDP growth could reached 5.3 percent in this year.

“We and BI (Bank Indonesia) predicts that economic growth this year could be in the range of -0.4 to 2.3 percent because household consumption is only 1.6 – 3.2 percent, investment is estimating dropped from 6 percent can be negative, exports are also expected to be negative because imports have increased,” she told media through a video conference on April 1.

Earlier, President Joko Widodo has signed the presidential decree number 1 of 2020 to accommodated the plans  The regulations in lieu is needed by the government to readjust the existing bill.

He also proposed, the government regulating the 2020 State Budget law and individual and corporate income tax act to accommodates the government needs to run the economic stimulus during the pandemic.

“The 2020 state budget will surely undergo a major change, especially macro assumption. What we discussed with the parliament was to prepare rules in situations of urgency. That is why the government can propose regulations to replace the 2020 State Budget law,” said the minister.

Written by Staff Editor, Email: theinsiderstories@gmail.com