Indonesia's Economic Growth May Slow Down After Coronavirus

TEMPO.CO, Jakarta - The novel coronavirus outbreak has become a new challenge for the world's economy and Indonesia is predicted to suffer a slowdown in its economic growth of around 0.23 percent as a result of China's downturn of one percent, an Indonesian official said. The prediction that the Indonesian Trade Ministry had made was lower than that of the world, Head of the ministry's Trade Research and Development Division Kasan said on Tuesday commenting on the impact of the virus outbreak on Indonesia's economy.

The World Bank has predicted that Indonesia's economic growth might suffer a downturn of up to 0.3 percent as a result of this new coronavirus outbreak whose epicenter is in the Chinese city of Wuhan, the capital of Hubei Province, he said.

Kasan argued that in every one percent of China's downturn in its gross domestic product, Indonesia was predicted to face a slowdown of around 0.23 percent. This calculation was made based on scientific findings.

Thus, if China's economic growth was predicted to decline from six to five percent, for instance, Indonesia's economic growth which had earlier been presumed to reach around 5.3 percent this year would likely be corrected, he added.

This new coronavirus outbreak would also affect the performance of Indonesia's exports and imports in January 2020. Several other countries might also suffer the same predicted situation as some of Indonesia's trading partners had released their data.

The data that five or six countries had released showed that they underwent a significant decrease in their respective exports and imports.

The countries whose export and import performance was affected by the coronavirus outbreak included Brazil, Vietnam, South Korea, Chile, and Pakistan, he added.

This deadly virus may not merely affect Indonesia's trade but also its investment. However, the Investment Coordination Board (BKPM) Head Bahlil Lahadalia opined that it has not yet shown any significant impact on the inflow of China's investments into Indonesia.

Apart from that, the government is examining measures necessarily taken to anticipate any potential decrease, he recently said.

In 2019, with total investment worth US$4.7 billion, China ranked second after Singapore as the biggest contributor of foreign investment for Indonesia. Singapore's total investments were recorded at $6.5 billion.

Japan is ranked third with a total investment of $4.3 billion while Hong Kong ranked fourth ($2.9 billion). It was followed by the Netherlands with investments of $2.6 billion.

ANTARA