The COVID-19 outbreak has shattered global economy and send countries into recession. With the outbreak initially occurred in China before escalated worldwide, the economy has been forced into recession as many countries’ economy around the world depend immensely on its trade and investment relationship with China. A study by The Economist Intelligence Unit predicts, the COVID-19 outbreak will shrink global economy growth by 2.5%.
However, the study also predicts Indonesia’s economy will continue to grow, despite the global recession. While the grow will significantly lower than the predicted growth before the crisis arises, the forecast shows Indonesia’s economy will grow by 1% in 2020. Indonesia will joins two other countries, China (1%) and India (2.1%) as the only three countries out of G-20 members to see its economy continue growing despite the COVID-19 outbreak. Latest World Economic Outlook Report by IMF also predicts Indonesia’s economy to continue growing in 2020 by 0.5% despite the large contraction in the world economy.
While government has provided several stimulus, monetary, and non-monetary policy to cope with the COVID-19 outbreak impact to the Indonesia’s economy, Chatib Basri (former Indonesia’s Minister of Finance) acknowledged the crisis will continue to put Indonesia’s economy and financial sector under pressure, during his webinar session for Australian National University; Indonesia Project. He then added, government should focus on helping the country’s health sector to get through the crisis while continue to provide social protections to companies and vulnerable part of society through direct payments and other mean necessary in the short run. In the long run, he suggested monetary policy to boost aggregate demand will be necessary and reducing the country’s reliance to China will provide better stability by differentiating global supply chain patterns.