"COVID-19 poses a challenge to the efforts to boost domestic economic growth," Bank Indonesia (BI) Governor Perry Warjiyo stated at a press conference here on Thursday.
Warjiyo noted that the spread of COVID-19, expanding its reach to 159 countries, had led to a decline in the global economic outlook.
This condition was partly the reason behind the weakening of Indonesia's goods export growth despite having improved in February 2020.
"The exports of services, especially in the tourism sector, are also expected to decline owing to hindered inter-country mobility processes in line with the efforts to mitigate the risks of the spread of COVID-19," Warjiyo noted.
Furthermore, a decline in the goods and services exports, caused by the disruption of the production chain, also contributed to a slowdown in non-construction investment.
Under such conditions, the central bank, along with the government and Financial Services Authority (OJK), will continue to closely monitor the spread of COVID-19 and its impact on Indonesia.
"Further steps for policy coordination are also necessary to maintain macroeconomic and financial system stability and sustain Indonesia's economic growth to remain good and resilient," he stated.
BI has also lauded the government's fiscal stimulus measures along with the planned regional head elections (pilkada) that is projected to sustain economic growth prospects.
Warjiyo estimates that if the handling of COVID-19 is successful, then economic growth in 2021 can lie in the range of 5.2-5.6 percent.
The projection is also influenced by various governmental efforts in improving the investment climate through the Bill on Employment and Taxation. Related news: BI maintains public duty, services to mitigate COVID-19 spread
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