Indonesia lowers economic growth forecast for 2021 hinh anh 1Illustrative image (Photo: Reuters)
Jakarta (VNA) – The Indonesian government has slashed the country’s growth projection in 2021 to 3.7 - 4.5 percent from the earlier prediction of 4.5-5.3 percent, given the serious impact of the latest wave of COVID-19 caused by the Delta variant and recent restrictions imposed in the two islands of Java and Bali.

Coordinating Minister for Economic Affairs Airlangga Hartanto said the lowering of growth forecast is based on the forecast that the growth in Q3 would only reach 3.7-4 percent. However, the government is optimistic that growth could pick up to 7 percent in Q4, the minister said.

According to Airlangga, Indonesia's economic growth will likely be affected by the emergency public activity restriction in Bali and Java as the two islands account for 60 percent of the total GDP even though the restriction would only last till July 20.

He said that stable exports will contribute to the growth from July to September this year. Besides, commodity prices in the global market for Indonesia's exports such as palm oil, coal, nickel, rubber, and aluminum are rising. 

Recently, in its June 2021 report on "Indonesia Economic Outlook", the World Bank (WB) forecast that the country's economy will grow by 4.4 percent this year, unchanged from the report released in January 2021./.