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Saturday, March 2, 2024

Indonesia president calls to “reboot” economy amid pandemic

Indonesia must use the coronavirus pandemic to reboot Southeast Asia’s biggest economy, President Joko Widodo said, as he proposed a $187 billion 2021 budget that includes spending more on healthcare, including vaccines, and infrastructure.

Widodo made the remarks in his annual state of the union and budget speeches to parliament. Due to coronavirus precautions, less than half of the lawmakers were present for his address, with the rest watching online.

Likening the current economic situation to “a computer crash”, he said Indonesia, along with other countries, must “shutdown, restart and reboot”.

“We must capitalize on the crisis as a momentum to make a big leap,” he said.

Widodo proposed a 2,747.5 trillion rupiah ($186.65 billion) 2021 budget, up 0.3% from this year.

He said the fiscal deficit should dip to 5.5% of GDP, from 6.34% in 2020, the highest in more than a decade as the government sought to shield the economy from the pandemic.

Indonesia has recorded the highest death toll due to coronavirus in Southeast Asia, though authorities have been pushing to reopen the economy.

Economic growth should rebound to 4.5%-5.5% next year, Widodo said, compared with government projections of stalled growth this year and a 5% rise in 2019.

The budget showed “the government is pretty optimistic about its expectation for economic recovery even as we see globally that the recovery in developed economies has been pretty slow,” said Josua Pardede, an economist with Bank Permata.

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