Indonesia's economy forecast to decelerate slightly in 2020

JAKARTA (Xinhua): The Indonesian government forecast the country's economy would decelerate slightly this year, head of the Fiscal Policy Office of the Finance Ministry Febrio Kacaribu said on Friday.

With that condition, Kacaribu stressed that Indonesia might not go into a deep recession as the tax revenue has started improving along with other signals of recovery.

Banks have commenced distributing loans for capitals as business activities pick up along with the reopened economy and relaxation of restrictions, he said.

According to the Indonesian Financial Services Authority, loans have begun creeping up in July after registering a downturn in the previous three months.

Kacaribu was upbeat that business activities including those in the sector of small and medium businesses, would recover soon.

The official said the authority has been striving to avoid two straight quarters of economic growth deceleration in the second and the third quarters.

"We encourage all sectors to pick up so that they can shore up the economy in the hope that the growth in the third quarter would not be negative, and hopefully it would be above zero per cent," he said.

For the final quarter, he expected the economy to accelerate by 2 to 3 per cent.

In the second quarter, the economy was expected to decelerate by 3.5 to 5.1 per cent after registering a 2.97-per cent growth in the previous quarter, Finance Minister Sri Mulyani Indrawati has said.

Indonesia's manufacturing Purchasing Managers' Index released by IHS Markit nudged higher to 39.1 in June from 28.6 in May.

President Joko Widodo has ordered regional administrations to speed up capital spending to help stimulate the growth.

The Covid-19 vaccine trials have allayed concerns over the fast transmission of the virus in the archipelagic country.

Indonesia recorded 1,761 additional cases on Friday, bringing the total to 95,418 with 4,665 deaths, according to the Health Ministry.

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Indonesia , economy , Febrio Kacaribu


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