Indonesia Institute of Development Economics Projection. The Institute for Development of Economics and Finance (Indef) sees that economic growth in the third quarter of 2020 will still be in a negative zone. After in the second quarter of 2020 the economy record a growth of minus 5.32% yoy.
Executive Director of Indef, Tauhid Ahmad. He said that the economy would grow by minus 3.09% yoy, and Indonesia was officially entering a recession. Why is it still a minus? Because the daily cases of the Covid-19 pandemic are still high. So, it still hinders our economic activities and this is compare to 2019.
Where there was no Covid-19, said Tauhid. Even so, when compare to the economy in the second quarter of 2020, the forecast for economic growth in the third quarter of 2020 does show improvement. According to Tauhid, this was cause by several things. First, economic activity that has begun to grow.
Although it is limit. This is reflect in the movement of mobility to the workplace, transit places, trade, and others. Second, in terms of household consumption, it also shows improvement, although not yet optimal. This can be seen from the increasing Consumer Confidence Index (IKK).
This improvement in household consumption growth can also be a breath of fresh air for the economic prospects. Moreover, household consumption is usually the motor of economic growth. However, in the period July 2020 to September 2020, Tauhid sees more that the economy is driven by government spending.
Acceleration of government spending originate from the distribution of the national economic recovery program (PEN) which is starting to become massive. In the future, Tauhid sees that the overall economic growth in 2020 will still be negative. The projection is that it will be in the range of minus 1.35% yoy to minus 1.8% yoy.
If you want the economy to be better, the key is to improve the health sector. According to him, limiting activities in red zone areas is also the right thing because it minimizes the transmission of Covid-19. In addition, the government also needs to pay more attention to the groups that are vulnerable and severely affect by the pandemic.
Moreover, this concerns the purchasing power and growth of household consumption. Finally, it is also necessary to pay attention to the impact of Covid-19 on the financial and financial sectors which are already underway.