"Indonesia’s economy contracted 2.19 percent (yoy) as expected in the fourth quarter of 2020, and it showed signs of recovery as compared to (the growth) in the third quarter (yoy), at -3.49 percent, and second quarter, at -5.32 percent," Budimanta noted in a statement here on Friday.
The contraction in economic growth was the impact of the COVID-19 pandemic that battered the domestic economy, both in terms of consumption and investment.
The pandemic has shaken the global economy that resulted in a decline in international trade.
"The impact of the pandemic was also felt in the fourth quarter of 2020 when the annual agenda of the Christmas and New Year's Eve could not move the economy like before," he pointed out.
However, Budimanta claimed that Indonesia's economic growth was relatively better than its trade partners during the corresponding period, such as Singapore, recording a growth of -5.8 percent; the US, -3.5 percent; and the European Union, -6.4 percent.
The Central Statistics Agency (BPS) stated that Indonesia’s economy had contracted 2.07 percent (yoy), but the government expenditure for consumption had grown 1.94 percent.
Budimanta opined that Indonesia can regain its positive growth if it manages to step up discipline in applying health protocols and boost public consumption.
"Hence, the labor intensive program and other programs that will create jobs are important to increase the people's purchasing power in addition to the government's social protection program," he stated.
The law on job creation is expected to boost investment and create jobs, thereby accelerating the nation’s economic recovery, according to Budimanta.
In 2021, the government has planned to allocate Rp619.83 trillion of the budget for COVID-19 handling, or some 3.5 percent of the gross domestic product (GDP).
"It means the government had continued to boost our economy to recover in terms of the supply and demand," he remarked. Related news: Indonesian economy contracted 2.07 percent in 2020: BPS
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Translator: Indra A Pribadi, Sri Haryati
Editor: Suharto
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