Government undecided over revising 2020 growth forecast of 5.3 percent

Government undecided over revising 2020 growth forecast of 5.3 percent

Finance Minister Sri Mulyani (left) and Vice Finance Minister Suahasil Nazara (right) conveyed the realization of the 2020 state budget in Jakarta on Wednesday (Feb 19, 2020). ANTARA FOTO /Puspa Perwitasari/foc.

We will first look at its impact on our economy. Of course, it will have an impact on China's GDP.
Jakarta (ANTARA) - The Indonesian government is yet to take a decision on revising its economic growth forecast of 5.3 percent for this year despite global slowdown over the spread of coronavirus, Finance Minister Sri Mulyani Indrawati stated.

"We will first look at its impact on our economy. Of course, it will affect China's GDP," she noted at a press conference in Jakarta on Wednesday.

The minister remarked that the coronavirus outbreak may impact the global economy since China, the world's second-largest economy after the US, contributes 17 percent of the global gross domestic product (GDP).

Most importantly, China has made utmost efforts to prevent the spread of coronavirus by restricting the mobility of its citizens in a way that the coronavirus outbreak can be kept under control and not reach pandemic status, she stated.

Indrawati has forecast that China will likely adopt a "countercyclical policy" through fiscal and credit expansion to facilitate economic recovery in the second or third quarters of 2020.

"We will look at it in this first quarter and thereafter there will normally be a stimulus from China. Its impact was extraordinary when they adopted a countercyclical policy in 2008," she pointed out.

With projected improvement in China's economy, the minister believes the global economic performance can still be kept under control. Moreover, the Indonesian government has prepared a budget stimulus to maintain the domestic condition.

"We should neither underestimate it nor should we be too pessimistic," she remarked.

She further highlighted the risk of a Chinese economic slowdown owing to the coronavirus outbreak. The occurrence may disrupt Chinese tourist arrivals in Indonesia since China is the second-largest source of tourist arrivals in Indonesia after Malaysia.

On the trade side, the coronavirus outbreak may disrupt Indonesia's exports to and imports from China. Nearly 27 percent of Indonesia's non-oil/non-gas imports and 16.7 percent of its exports are directly related to China, she pointed out. Related news: Indonesia diverts attention to domestic tourists over coronavirus

Related news: Indonesia plans medical center for disease control


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