Jakarta (ANTARA) - The outbreak of COVID-19 will correct Indonesia's economic growth by up to 0.29 percent in 2020, a researcher at the Center for Economic Research of Indonesian Institute of Sciences (LIPI) has said. Previously at the end of 2019, the LIPI Economic Research Center had predicted Indonesia's national economic growth will reach 5.04 percent for the year 2020.
"The coronavirus outbreak that China contracted led to the weakening of the economy. The condition was subsequently followed by the Indonesian Government's policy on export-import restrictions to China making the figure difficult to achieve," head of the Center for Economic Research LIPI Agus Eko Nugroho said in a statement in Jakarta, Wednesday.
The results of the calculation showed Indonesia's economic growth would be corrected by 0.19 percent to 0.29 percent, Agus explained.
The growth would be 4.84 percent for moderate cases and only reach 4.74 percent if the panic continues to increase.
"It is just the effect of the first round," he said.
The tourism sector first became impacted by the potential loss of national foreign exchange revenues reaching US$2 billion.
"The figure is of simulated results based on the calculation of the 2019 record. There were two million tourists from China who visited Indonesia with an average length of stay of six days and spent $157 per person per day," a researcher from Research Center for Economics of LIPI, Panky said.
The assumption of this calculation could be used as a prediction for 2020, tourists from China would delay or cancel their trip to Indonesia, he explained.
The Indonesian trade sector is also predicted to undergo several contractions. More than 495 types of commodities with China's export objectives will be affected, while about 499 types of imported goods from China are expected to shrink or even disappear from the Indonesian market.
"The majority of products that are strategic consumables will have serious implications for domestic inflation. The government needs to monitor market conditions considering the potential price movements ahead of Ramadan and Idul Fitri," Panky said.
He also advised the Financial Services Authority to provide credit maturity for micro Small enterprises (MSMES) that could potentially be affected by the weakening of China's economy.
"Various strategic steps should be prepared to reduce the potential negative impact of the economy and several trading blockages due to the Covid-19 outbreak," he said.
Source: Antara News