OECD projects Indonesia’s economy to grow by 4.9 percent in 2021

Jakarta (Indonesia Window) – The Organization for Economic Co-operation and Development (OECD) has projected that Indonesia’s economy would grow by 4.9 percent in 2021.

Based on the survey, Indonesia’s economic growth is expected to again increase to 5.4 percent in 2022.

OECD Secretary General Angel Gurria said that Indonesia’s economic recovery after the pandemic would take place gradually and depend on the handling in the health sector.

“Indonesia is facing its toughest challenges since the 1997 crisis. With the right reforms, Indonesia can harness the energy and talents of its young population and make the economy move forward again,” said Gurria during the OECD Economic Review of Indonesia 2021 on Thursday (March 18).

On that occasion, Minister of Finance Sri Mulyani Indrawati talked about the steps taken by the Indonesian Government in dealing with extraordinary situations due to the COVID 19 pandemic.

The government has relaxed fiscal and monetary policies, one of which is by widening the deficit to 6.09 percent of the Gross Domestic Product (GDP) in 2020.

“I think this is relatively low compared to other OECD countries, right? So we will experience a deficit in 2020 of around 6.1 percent and at the same time the economic condition is also relatively good and the contraction is around two percent. That is one of the achievements that we also use to respond to the 2021 situation,” she said.

The government’s spending is focused on dealing with pandemics, especially in the fields of health and social protection as well as maintaining the continuity of the business world.

With the government’s prompt and precise response, Indonesia’s poverty rate stays at around 10.4 percent, lower than the World Bank’s prediction of above 11.4 percent.

“Now we really need to focus on how to ensure that the recovery process will continue. At the same time, we will also accelerate this recovery and look at which areas that need more policy support. This is very pragmatic, yet flexible, transparent and accountable,” said the minister.

Reporting by Indonesia Window