PT Sarana Multi Infrastruktur (Persero) predicts Indonesia’s economic growth in 2020 will contract between minus 1.13 percent to minus 0.82 percent. The Indonesian economy is under pressure due to the covid-19 pandemic.
“We at PT SMI project a pessimistic scenario of Indonesia’s economic growth of minus 1.13 percent and an optimistic scenario of minus 0.82 percent,” said Chief Economist PT SMI I Kadek Dian Sutrisna Artha in an economic update webinar with the theme ‘The Face of Indonesia’s Economy in the Era New Normal ‘in Jakarta, Monday, July 27, 2020.
The prediction of economic growth from PT SMI is lower than the estimates of the Ministry of Finance (Ministry of Finance). For this year, the Ministry of Finance projects Indonesia’s economic growth to be minus 0.4 percent to one percent. Meanwhile next year, both the Ministry of Finance and PT SMI both predict economic growth in Indonesia could return positive. If the Ministry of Finance is between 4.5 percent and 5.5 percent, PT SMI estimates 4.6 percent to 5.1 percent in 2021.
Even so, PT SMI assesses the impact of the co-19 pandemic has more impact on the economy in developed countries. This is what happened in Singapore, which experienced a recession after the economy experienced negative growth for two consecutive quarters.
“If it is projected that economic growth in Indonesia is minus but it still has relative resilience compared to other developed countries. Why? Because Indonesia’s dominant economy is around 50 percent contributed by domestic consumption,” he explained.
When there is a global economic recession, Indonesia’s economic growth is predicted to be able to survive. The second quarter economy which is predicted to grow negatively due to the Large Scale Social Restrictions (PSBB) is expected to start to turn around in the third quarter.
“Indonesia’s economy in the second quarter is expected to decline, but in the third quarter it is expected that the third quarter will increase again. Hopefully it can be positive along with the reopening of the economy gradually but still holding on or adhering to the health protocol,” he concluded.