Saturday, 28 November 2020 | 20:42 WIB

President Joko Widodo Says Indonesia Has Entered Recession

Indonesia President Joko Widodo (setneg)

JAKARTA, NETRALNEWS.COM - Indonesia President Joko Widodo estimates to see economic growth of around minus three precent in the third quarter of 2020. This means that Indonesia is officially entering recession, after in the previous quarter, the economic rate was minus 5.32 percent.

"In the third quarter, perhaps one day, two days, three days, the figures will be announced by BPS, which would also still be in the negative figure. Our estimate is minus 3 percent, up slightly," Joko Widodo said in a press conference on Monday (11/02/2020).

In addition, the President said that investment realization was still low in the third quarter of 2020. He estimates that investments have the potential to surpass minus five percent.

He admitted that he had asked the Investment Coordinating Board (BKPM) and the Coordinating Ministry for Maritime Affairs and Investment so that investments in the third quarter of 2020 could be below minus five percent. However, it is difficult to realize.

"It cannot be pursued yet. Therefore, it must be pursued in the fourth quarter of 2020 and the first quarter of 2021," Joko Widodo said.

Even though it was negative, Joko Widodo claimed that the figure was still better than the realization in the second quarter of 2020, which was minus 5.32 percent. In addition, he also said that Indonesia's economic situation is still better than in other countries.

"This, when compared to other countries, is still much better," he added.

For the fourth quarter of 2020, Joko Widodo has asked all ministries to increase spending to encourage public demand, so that household consumption can improve by the end of the year.

"At the end of the quarter, I expect actual expenditure to really be at its maximum," the President said.

Previously, Indonesia Finance Minister Sri Mulyani had projected that the economy in the third quarter of 2020 would reach minus 1 percent to minus 2.9 percent. The figure is higher than Joko Widodo's estimate.

Sri Mulyani explained that the total contribution of government spending to economic growth was 18 percent. According to her, expenditure realization until the end of September rose rapidly compared to the second quarter of 2020.

Overall, Sri Mulyani predicts that Indonesia's economy will be at a negative until the end of the year. To be precise, the domestic economy will be minus in the range of 0.6 percent to 1.72 percent.

For information, the Central Statistics Agency (BPS) reported that the economy in the second quarter of 2020 shrunk by 5.32 percent. This figure is inversely proportional to the second quarter of 2019 at 5.05 percent.

This figure is also inversely proportional to the economy in the first quarter of 2020 which was still able to grow by 2.97 percent. Meanwhile, economic growth during the first semester of 2020 compared to the first semester of 2019 also contracted by 1.26 percent, as reported by CNN Indonesia.