The national economy contracted 2.19 percent in the fourth quarter of 2020 compared with a contraction of 3.49 percent recorded in the previous quarter.
This year, the ministry noted, several indicators have shown signs of improvement, with the purchasing managers' index (PMI) rising to 52.2 in January, 2021 from 51.3 in December, 2020.
“This is the highest level in the past six years. Public confidence has also continued its positive trend,” chief of the ministry's fiscal policy board, Febrio Kacaribu, said in Jakarta on Friday.
The ministry has also predicted that national economic growth will return to its pre-pandemic level of around 5 percent this year.
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However, the projections suggest uncertainty about the development of COVID-19 and the implementation of the vaccination program.
According to Kacaribu, the Indonesian economic performance has shown signs of recovery and is on the right track. The performance will be pushed at a faster pace, particularly with the start of the vaccination program which is being conducted in a measurable and well-planned manner, he added.
The ministry will ensure the strong fiscal policy seen in 2020 remains in place and functions as a countercyclical instrument this year as reflected by the budget deficit of 5.7 percent of the national gross domestic product (GDP), he said.
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The government will continue to focus on implementing the national economic recovery (PEN) program in 2021 by supporting either the household sector or the business sector particularly, micro, small, and medium businesses, he added.
"The PEN program will continue to ensure that the handling of COVID-19 cases runs effectively, maintain the purchasing power of the people, and stimulate business recovery," he said.
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