WB: Indonesia’s economy to contract faster than expected
Indonesia’s economy could contract more than expected if the coronavirus pandemic remains uncontrolled, as Southeast Asia’s largest economy faces an “uneven and volatile” economic recovery, according to the World Bank (WB).
Jakarta (VNA)ꦯ - Indonesia’s economy could contract more thanexpected if the coronavirus pandemic remains uncontrolled, as Southeast Asia’slargest economy faces an “uneven and volatile” economic recovery, according to the World Bank (WB).
The bank’s East Asia and Pacific Economic Update published on September 29 showed that Indonesia’seconomy will fall by 1.6 percent this year under the baseline scenario. In June, it had projected zerogrowth. However, the economy may contract even by 2 percent if the country fails to control thepandemic.
“It is in countries like Indonesia and the Philippines that recovery will be much slower, because they havenot succeeded in controlling the disease,” said Aaditya Mattoo, WB ChiefEconomist for East Asia and the Pacific.
It is expected that theIndonesian economy will recover next year with a growth of between 3 and 4.4percent, he said.
Febrio Kacaribu, head of the fiscalpolicy office at Indonesia’s finance ministry, stated that in general, the WBforecast is still in line with the latest government assessment which estimatesthat Indonesia’ economic growth will be in the range of -1.7 to -0.6 percent.”
Previously, the Asian Development Bank (ADB) and the Organisation for EconomicCooperation and Development (OECD) predicted respective contractions of 1 percentand 3.3 percent for the Indonesian economy this year./.
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