BI revises downward national economic growth forecast to 3.5%

BI revises downward national economic growth forecast to 3.5%

A screenshot of BI Governor Perry Warjiyo announcing the outcome of the meeting of the central bank's board of governors in Jakarta on Thursday (July 22, 2021). (ANTARA/Agatha Olivia)

The economy is expected to grow lower in the third quarter of 2021 owing to the government's policy to enforce public mobility restrictions to contain the spread of the Delta variant of COVID-19.
Jakarta (ANTARA) - Bank Indonesia (BI) has revised downward its forecast for national economic growth in 2021 to 3.5-4.3 percent from 4.1-5.1 percent citing the spread of the Delta variant of COVID-19.

 

The revision has been necessitated by the COVID-19 pandemic, which could disrupt third-quarter economic performance, BI Governor Perry Warjiyo said while announcing the outcome of the meeting of the central bank's board of governors in Jakarta on Thursday.

 

"The economy is expected to grow lower in the third quarter of 2021 owing to the government's policy to enforce public mobility restrictions to contain the spread of the Delta variant of COVID-19," he said.


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The public mobility restrictions may have an impact on household consumption, although the government has decided to increase social assistance, he added.

 

The Indonesian economy began to recover in the second quarter of 2021, fueled particularly by rising exports, fiscal budget and non-construction investment, Warjiyo said.

 

"The development of several early indicators in June, 2021, including retail sales and PMI (purchasing managers' index), showed signs of ongoing economic recovery," he remarked.

 

He predicted economic growth will bounce back in the fourth quarter of 2021, fueled by increasing public mobility, an accelerated vaccination program, strict adherence to health protocols, extension of stimulus packages, and improving export performance.


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