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Jakarta Post

Jokowi's economic growth target unrealistic: Indef

  • Adrian Wail Akhlas

    The Jakarta Post

Jakarta   /   Fri, February 7, 2020   /   07:47 am
Jokowi's economic growth target unrealistic: Indef Indonesia's economy grew 4.97 percent between last year’s fourth quarter and the same period the year before, the weakest in almost three years, Statistics Indonesia (BPS) announced on Wednesday. (JP/Ricky Yudhistira)

The government's economic growth target in 2020 is unrealistic given last year’s sluggish economic expansion and looming risks from the coronavirus outbreak, economists have said.

Institute for Development of Economics and Finance (Indef) economist Abdul Manan Pulungan said the global uncertainty that hampered global growth last year would continue this year, adding that there was no sign that Indonesia’s exports would pick up.

"The 5.3 percent economic growth target in 2020 is no longer realistic because the global condition is pressured by the weakening of China's economic performance as a result of the novel coronavirus outbreak," Abdul told reporters in Jakarta on Thursday, referring to the government’s gross domestic product (GDP) growth target outlined in the state budget.

Read also: Indonesia sees gloomy outlook on economy as growth falls below 5%

The country’s GDP grew 4.97 percent between last year’s fourth quarter and the same period the year before, the weakest in almost three years, Statistics Indonesia (BPS) announced Wednesday. Throughout 2019, Indonesia’s economy grew 5.02 percent, the slowest since 2015.

The 2019-nCoV virus, which causes a pneumonia-like illness, has infected more than 28,300 people across the globe with 565 deaths across several countries as of Thursday afternoon. Businesses in China have been forced to close or limit their activity amid lockdowns in some provinces in an effort to curb the spread of the virus.

A similar situation is expected to hit Indonesia, which relies heavily on trade and tourism with China.

China imported US$23.54 billion of non-oil-and-gas commodities from Indonesian from January to November last year, topping the list with a more than 16 percent share of Indonesia’s total exports, Statistics Indonesia data shows.

Read also: Indonesia ratifies long-awaited free trade deal with Australia

In the other direction, China shipped $40.51 billion of commodities to Indonesia, almost one third of Indonesia’s total imports during the same period, resulting in a $16.97 billion trade deficit for Indonesia.

Adding to the two countries’ connections, Chinese tourists account for the second-highest number of foreign tourist visits to Indonesia, after Malaysia.

“Economic growth below 5 percent in 2020 should not be ruled out,” Bank Central Asia chief economist David Sumual told The Jakarta Post on Wednesday. “The coronavirus outbreak will lower foreign investment from China and also lower China’s demand for Indonesia’s commodities.”