A corner of Jakarta (Source: Indonesia Expat) Jakarta (VNA) - The International Monetary Fund (IMF) projected that Indonesia’s economic growth will remain in positive territory this year, albeit ever so slightly, as the coronavirus pandemic puts the global economy at risk of its worst recession since the Great Depression of 1930.
In its April update to the World Economic Outlook titled “The Great Lockdown”, the IMF lowered Indonesia’s GDP growth projection to 0.5 percent from 5.1 percent in its October projection.
“The significant downward revision to the 2020 growth projection reflects large anticipated domestic disruptions to economic activity from COVID-19,” the report says. The IMF expects the virus to hit Indonesia’s economy as the country relies heavily on the export of commodities rather than finished goods.
“Among developing economies, all countries face a health crisis, severe external demand shock, dramatic tightening in global financial conditions, and a plunge in commodity prices,” the report says. “They will have a severe impact on economic activity in commodity exporters.”
However, the IMF predicted that the Indonesian economy will recover in 2021, with an expected growth rate of 8.2 percent, which would be the highest rate seen since 1995, during former President Soeharto's regime.
The IMF also projected that the country’s unemployment rate will rise to 7.5 percent this year from last year’s 5.3 percent as the pandemic is upending supply chains, forcing companies to lay off employees and crushing demand for goods as consumers stay at home.
According to the IMF, the global economy will contract by 3 percent this year, far worse than during the 2009 global financial crisis, as the pandemic put the global economy at risk of worst recession since the 1930 Great Depression.
However, the global economy is expected to grow by 5.8 percent in 2021, signaling a sharp rebound from this year's recession./.
VNA
