Source: Cnbcindonesia.com | 11 Jun 2020

It is predicted that Indonesia’s economic conditions will still be looking for ways to grow in the next few years. Through the mainstay sector, namely household consumption.

However, it is not in the short term that its growth will accelerate. On the other hand, it will take some time to come.

“For the next 5 years we have a new track, in that economic growth is lower than the potential output,” said senior economist Faisal Basri in a virtual INDEF discussion, Wednesday (10/6/2020).

“So that at least in the next 5 years from now on we will experience an output loss. So the loss of output that the economy can actually produce, “

He considered that it would take a long time to see Indonesia’s economic growth increase as it should be. Faisal agreed with the Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan in terms of Indonesia’s economic recovery due to Covid-19.

Previously, Luhut said that it would take several years for this recovery. “Agree with what Pak Luhut said that Indonesia’s recovery will take 5 years and everything will be clean. Maybe it won’t take 5 years if the policy design will be better, “he said again.

Luhut had also predicted stagnant economic growth for some time. Namely, Indonesia’s economic growth will be corrected in the second quarter of 2020.

Luhut admitted that he was not surprised because he had predicted in advance. “In Q1 we indeed added 2.97%. This is relatively good compared to other countries experiencing contraction. But we see Q2’s growth may be even lower, “said Luhut.

Economic growth of 2.97% has fallen greatly compared to year on year (yoy) with Q1-2019 which had reached 5.1%. The decline was due to large-scale social restriction schemes, which made economic activity ineffective.

However, one of the sectors that Indonesia is leading and relies on is the consumption sector. In total, there are 7 leading industrial sectors which are targeted to contribute up to 69% to the domestic economy.