Indonesia: BI upbeat about 5.5% economic growth despite coronavirus threat

  • Bank Indonesia (BI) is optimistic that Indonesia will record an economic growth of 5.1-5.5% in 2020 despite a new strain of coronavirus that originated in China having spread to several other countries.
  • “Admittedly, the coronovarius outbreak is a global issue. However, the world believes it will be temporary. After its vaccine is found, the incident is forecast to last for six months,” BI Deputy Governor Dody Budi Waluyo stated in Mataram, the capital of West Nusa Tenggara Province, on 10 Feb 20.
  • The global economy will likely slowdown in the 1H20 and will thereafter improve along with the Chinese government’s efforts to handle the impact of the coronavirus.
  • “The key rests with how fast China will find a way to tackle the virus. However, as what we look at now, all of the Chinese government’s policies are very expansive to settle the existing problems,” he stated.
  • He noted that the Indonesian economic growth in 2020 may be higher than that of 2019 that had reached 5.02% owing to BI’s policy to cut the interest rate since 2019. In 2020, the policy should begin to have an impact on the national economy.
  • Moreover, the first phase of the US-China trade agreement has been inked. Both nations are entering the second phase. Thus, optimism has risen that the global economy or trade in 2020 will perform better than that of 2019.
  • If the global trade has improved, it will push the global commodity prices and eventually boost the exporters’ income and so will the national income and consumption, he pointed out.

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