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Sri Mulyani slashes 2020 economic growth outlook to 1%

19 June 2020 12:23

JAKARTA - Finance Minister Sri Mulyani Indrawati has slashed Indonesia’s 2020 economic growth outlook from 2.3% to around 1% with an estimated contraction of 0.4%.

“We have revised the upper limit of 2.3% to 1% because we see a significant contraction in the second quarter,” Ms Indrawati said at a work meeting with the House of Representatives’ Budget Committee on Thursday (18/6) as quoted from Antara.

The actual figures, said Ms Indrawati, will highly depend on economic recovery efforts in the third and fourth quarters. She estimates that household consumption, whose consumption to the economy amounts to 57%, will slow down to 0% in Q2 due to the coronavirus (COVID-19) pandemic.

“How we can recover from inflation in the next quarter will be the most essential part in the 2020 economic recovery scenario, and we expect to accelerate the momentum in 2021,” the former World Bank Managing Director said.

In addition, Ms Indrawati added that the economic growth outlook for 2021 will remain in the range of 4.5%-5.5% in line with the 2021 Macroeconomic Framework and Fiscal Policy Principles (KEM-PPKF).

“Our economic growth in 2021 will likely reach the range of 4.5% to 5.5% in line with the KEM-PPKF that we have previously presented to members of the House,” she concluded. (MS)

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