"We will convey the outlook of 2021 to the parliament. Our economic growth is expected to lie in the range of 4.5 to 5.5 percent, with inflation at two to four percent," Finance Minister Sri Mulyani Indrawati stated during a virtual press conference after a cabinet plenary session chaired by President Joko Widodo from the Bogor Presidential Palace in Bogor, West Java, on Tuesday.
Indrawati expounded that the target was set with optimism of a national economic recovery in the third quarter of 2020 or the fourth quarter of the year at the latest.
We will see the projection since honestly, today, we are still studying the situation in the second quarter and the progress achieved in the handling of COVID-19," the minister remarked.
Indrawati noted that pressures on economic growth would be sensed in the second quarter of 2020 and might continue until the third quarter of the year if the situation of the COVID-19 pandemic had yet to show improvement.
The minister stated that in the second quarter of 2020, economic growth was forecast to reach 0.3 percent, or in a worst-case scenario, it could touch zero to minus 2.6 percent.
Indrawati was upbeat about the national economy starting to recover, with growth in the range of 1.5 to 2.8 percent.
"It is very tough, but we are dealing with this extraordinary situation, and we are striving to overcome this," she emphasized.
In the meantime, inflation rate is projected to lie in the range of two to four percent in 2021. The state budget deficit is forecast to decline to three to four percent, from a possible deficit of 5.07 percent in 2020.
"As mandated in the government regulation in lieu of Law No. 1 of 2020 on state financial policy and financial system stability, within three years until 2022, the deficit can cross the three-percent level. We have to be careful. This year, we will maintain (the deficit) at five percent or lower if we can do it with discipline. Next year, the deficit is expected to lie in the range of between three and four percent," she added.
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