ER
THE WORLD Bank projects Indonesia’s economic growth to grow 5.2 % next year. In the Indonesia Economic Prospect report, the World Bank stated that this projected economic recovery can be achieved as long as Indonesia does not experience a wave of COVID-19 due to the emergence of new variants.
World Bank Director for Indonesia and Timor-Leste Satu Kahkonen said economic growth projections for 2022 were largely unchanged. However, the government is also expected to accelerate the implementation of COVID-19 vaccinations to reach 70% of the population next year.
“The projections assume that vaccine launches will develop with most provinces reaching 70% vaccine coverage by 2022 and Indonesia will not experience a new severe wave of COVID-19,” he said in a video conference, Thursday (12/16).
He added that the projected 5.2% economic growth next year also needs to be supported by accommodative domestic monetary and fiscal policies. In addition, there is also support for global trade growth and a moderate increase in commodity prices amid tightening global financial conditions.
“Household and intensive business consumption are expected to rebound more strongly as wider vaccinations improve consumer sentiment and some demand will increase,” he said.
Maintaining economic momentum
To maintain economic momentum and prevent the pandemic’s lasting economic and social impact, authorities need to focus on policy responses that strengthen investment, accelerate human capital accumulation, and increase productivity, the report recommends.
He said other challenges include tackling the pandemic by accelerating vaccine launches in disadvantaged areas and accelerating testing, tracing and treatment, as well as maintaining an accommodative monetary and financial policy stance while preparing for policy calibration in line with growing global and domestic financial pressures.
“It is also important to increase fiscal space for the pandemic response and for medium-term fiscal sustainability. Indonesia’s structural reforms will be critical to building a more competitive, resilient and greener economy,” he concluded. [medcom.id/photo special]
