Indonesian economy likely to rebound but risks loom

A firefighter sprays disinfectant at Kramat Jati wholesale market in East Jakarta on June 22, 2020. Authorities continue to disinfect public places, including traditional markets, to break the chain of Covid-19 transmissions. - JP

JAKARTA (The Jakarta Post/ANN): Indonesia’s economy is likely to return to growth in 2021 as Covid-19 vaccines become available and monetary and fiscal stimulus measures are extended, but economists worry that coronavirus-related risks could still hamper the recovery.

The government, the central bank and various international institutions have predicted that Southeast Asia’s largest economy will grow between 4.4 and 6.1 per cent this year, largely driven by an expected recovery in consumer spending after vaccines become widely available, commodity prices rise and monetary and fiscal stimulus packages take effect. “Vaccination will play a key role in supporting economic growth in the second half of 2021 and will help boost household spending, ” Bank Mandiri economist Faisal Rachman told The Jakarta Post in December.