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Indonesia ‘vigilant’ about economic risks of coronavirus
The Chinese New Year, which took place in January, should have given momentum to China’s economy, Sri Mulyani told lawmakers. “The outbreak has resulted in the country failing to realize its economic potential."
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An Indonesian health official thermally scans passengers arriving amid a deadly coronavirus outbreak which began in the Chinese city of Wuhan, at the Husein Sastranegara airport in Bandung on Monday. (AFP/Timur Matahari)
T
he government believes the spreading coronavirus in China will add to downside risks and uncertainties in the domestic economy as Indonesia’s largest trading partner braces for a blow to its economic growth.
The Chinese New Year, which took place in January, should have given momentum to China’s economy, Sri Mulyani has told lawmakers. “The outbreak has resulted in the country failing to realize its economic potential."
Each percentage-point decline in China’s growth rate results in a 0.3 percent drop in Indonesia’s, the World Bank has said. China’s economic growth hit a 29-year low in 2019 at 6.1 percent while Indonesia’s latest data showed 5.02 percent annual economic growth in the third quarter of last year, the slowest in more than two years.
"For now, the biggest battle is to keep investors’ trust in the country's economy amid uncertainties and lower confidence,” Sri Mulyani said. "We must first prepare policy instruments to mitigate the risks and maintain economic stability."
The Jakarta Composite Index, the benchmark stock price gauge on the Indonesia Stock Exchange, dropped three consecutive trading days from Friday to Tuesday as world shares and oil prices dropped over concerns about the coronavirus’s impact on the global economy. Safe haven assets like the Japanese yen and gold rose.
As of Tuesday morning, the 2019 novel coronavirus (2019-nCoV) has killed about 132 people in mainland China and has infected more than 6,000 worldwide since it was first identified in Wuhan on Dec. 31, 2019.
Confirmed cases have been reported in Malaysia, Singapore, Thailand, Vietnam, Hong-Kong, Macau, Taiwan, Japan, Nepal, South Korea, Australia, France and the United States, according to the US Center for Disease Control and Prevention (CDC).
