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Govt expects Indonesia to miss 2021 GDP growth target
The Office of the Coordinating Economic Minister's Iskandar Simorangkir said restrictions would dampen consumption, investment and export growth, which contributes over 80 percent of GDP.
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A child rides a bicycle on the closed Jl. Al-Fathu in Soreang, Bandung regency, West Java on July 4, 2021. The Bandung regency administration has closed several roads to limit public mobility during the emergency public activity restrictions (PPKM Darurat) period from July 3 to 20. (Antara/Raisan Al Farisi)
T
he Indonesian government has acknowledged that the country’s gross domestic product (GDP) growth will likely fall below the initial target of 4.5 to 5.3 percent for this year following the enactment of emergency public activity restrictions (PPKM Darurat).
Iskandar Simorangkir, macroeconomy and finance deputy at the Office of the Coordinating Economic Minister, said the emergency restrictions would dampen consumption, investment and export growth, which collectively contribute over 80 percent of GDP.
“With the tightening of the mobility restrictions, it is likely that our economic forecast [for 2021] will be below 4.5 to 5.3 percent,” Iskandar said at a webinar on Tuesday.
His statement legitimizes many economists’ warnings that a second COVID-19 wave would derail Indonesia’s economic recovery target for this year as such a wave would compel the government to impose fresh mobility restrictions.
Read also: New COVID-19 variants may jeopardize economic recovery in Indonesia
Official data show that COVID-19 caseloads began rising in early June and began breaking record-highs later that month, reaching over 31,000 new cases and 728 deaths on Tuesday, paralyzing the country’s healthcare system.
The government responded with 14 days of emergency restrictions across Java and Bali starting July 3 that include banning dine-in at restaurants, mandating work-from-home arrangements for non-essential businesses, tighter travel checks and road closures, among other curbs.
