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Govt bets on Q4 growth to cover Q3 losses
Coordinating Economic Affairs Minister Airlangga Hartarto has said the government will focus its resources on containing the second COVID-19 wave in the third quarter.
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Construction of the Cawang-Dukuh LRT in Dukuh Atas, Central Jakarta, carries on despite the COVID-19 pandemic on Aug. 13, 2020. (JP/Seto Wardhana)
T
he government is banking on fourth-quarter gross domestic product (GDP) growth to reach its annual target as an unprecedented COVID-19 wave promises to dampen the third-quarter economic recovery.
Coordinating Economic Affairs Minister Airlangga Hartarto told reporters on Thursday that the government would focus its resources on containing the second virus wave in the third quarter so that it could ease public activity restrictions (PPKM) by the fourth quarter.
He said the government aimed to lower the number of active COVID-19 cases to around 200,000 before the fourth quarter, down from the current level of around 500,000 but still higher than the average of around 100,000 active cases in the second quarter.
The government has lowered its best-case third-quarter GDP growth outlook from 5.7 percent to 5.4 percent but has held its best-case fourth-quarter outlook at 5.9 percent. Under this scenario, full-year GDP would grow 4.5 percent.
“The government sees potential for the fourth quarter to turn things around again,” Airlangga said at a virtual press conference, where he was accompanied by five other ministers.
The press conference was held on the same day Statistics Indonesia (BPS) announced that Indonesia’s GDP had grown at a 17-year high of 7.07 percent in the second quarter. GDP is expected to slow down in the third quarter as a result of emergency and multi-tiered PPKM.
Indonesia introduced emergency PPKM on July 3 and has extended restrictions, under a different name, three times. The current end date is Aug. 9, with a plan to start easing curbs in September depending on the COVID-19 caseload.
