ER
RESTAINED prospects for world economic recovery after the corona virus outbreak that affected tourism, inflammation and investment in Indonesia is behind Bank Indonesia (BI) correcting economic growth in the range of 5% -5.4%.
According to BI Governor Perry Warjiyo in Jakarta in his statement said earlier, the Indonesian government set a target of economic growth this year around 5.1% to 5.5%. Optimism changed after the corona virus outbreak hit the Chinese economy and hampered the recovery of the global economy at least in the first quarter of this year.
Even President Joko Widodo in the 2020 National Investment Coordination Meeting in Jakarta recently stated that the condition of the global economy is predicted to continue slowing this year. The unfinished trade war and compounded by the emergence of the corona virus outbreak are the main causes.
“Nevertheless the Indonesian government is targeting economic growth of 5.3%. Rationalists from Indonesia can seize opportunities and realize investments of up to IDR900 trillion this year,” President Jokowi said.
In addition to revising economic growth, BI also lowered the benchmark interest rate by 25 basis points (bps) to 4.75%. The daily deposit liquidity (deposit facility) interest rate was also reduced by 25 bps to 4.00% and lending facilities to banks that require daily liquidity (lending facility) were cut 25 bps to 5.50%.
Economists also considered BI’s decision to reduce the benchmark interest rate was right. If the corona virus outbreak prolongs its impact on the global economy is significant, it is necessary to continue the accommodative policy mix to encourage domestic economic activity. [sources/photo special]
