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View all search resultsIndonesia must control virus spread to hasten recovery: Economists
Finance Minister Sri Mulyani Indrawati expects the economy to grow at no more than 0.5 percent or even contract further in the third quarter, while fourth-quarter GDP growth is projected to be near 3 percent.
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ndonesia must focus on controlling the spread of the coronavirus to speed up the economic recovery, economists have said, arguing that the current healthcare response could instead push the economy into a deep recession this year.
The government should implement strict virus containment protocols, such as those implemented by China and Vietnam, to expedite the economic recovery, said the Institute for Development of Economics and Finance (Indef) economist Didik Rachbini on Thursday.
“We should not dream of an economic recovery if we can’t control the virus spread,” Didik said in a virtual discussion. “Although we may not see another lockdown, the government must shift its focus to control the pandemic first or its risks a deeper economic slump.”
Indonesia’s economy shrank 5.32 percent in the second quarter, the worst since 1999’s first quarter, as all components of economic activity, except net exports, plunged amid large-scale social restrictions (PSBB) implemented in much of April and May to curb the virus spread.
The decline marks the beginning of a near-certain recession, Didik added.
Several economies, such as China and Vietnam, performed much better in the second quarter as they implemented stricter virus containment measures, with China recording 3.2 percent gross domestic product (GDP) growth after a first quarter contraction and Vietnam’s GDP grew 0.36 percent.
