The condition of countries in various parts of the world experiencing ups and downs due to the symptoms of the COVID 19 pandemic. Telecommunications and activities involving humans have decreased dramatically because people are encouraged to stay at home as long as COVID 19 is not yet completed its handling and controlling to reduce.
One of the causes of the corona virus easily spreads in Indonesia is because Indonesia is a country with various sectors that afford the dynamic situation in economic activities.
Based on the assessment with the worst case scenario Indonesia will experience an economic slowdown of minus 0.4 percent.
Besides trying to deal with the spread of the corona virus in the country, Indonesia cannot be separated from the dynamics of the global economy. As is known, all countries are currently still focusing on dealing with the Covid-19 outbreak, which in turn disrupts investor confidence, the tourism / travel sector, supply chain and financial markets. The prospect of the weakening of the global economy is compounded by the tendency of weakening global crude oil prices.
Minister of Finance Sri Mulyani together with the Financial Sector Stability Committee (KSSK) consisting of the Ministry of Finance, BI, OJK and LPS, conducted an assessment to estimate the severe and toughest scenarios we might face as a result of the impact of Covid-19 on the Indonesian economy.
In reference to public news on Liputan6.com, Jakarta – Indonesian Center for Reform on Economics (Core) Research Director Pieter Abdullah predicts Indonesia’s economic growth in 2020 will be below 5 percent. This condition has been predicted since the end of last year due to weakening global economic growth.
This condition is more apparent after the spread of the corona virus in January. Throughout 2020 he estimated economic growth would be at 4.9 percent to 5.1 percent.
Indonesia is one of the countries infected with the Covid-19 pandemic, on March 26, 2020 recorded 893 people were positive for Corona virus. Among them, 35 people recovered, 780 people were treated, and 78 people died.
One of the causes of the corona virus easily spreads in Indonesia is because Indonesia is a country with a tourism sector. The tourism sector is one of the factors that play an important role in Indonesia’s economic growth and has the second largest contribution of foreign exchange in Indonesia after the foreign exchange of palm oil exports.
For example, deteriorating macro-economic indicators such as the exchange rate, economic growth, trade balance, composite stock price index (CSPI), etc. will clearly hit the purchasing power of household consumers while reducing consumer expectations and levels of confidence in the economic outlook.
In addition, the decline in purchasing power can spread to the inability of debtors to pay their debts to creditors, usually banks, resulting in default. This will also drag the fall of the banking sector. Because the banking sector is weakening, banks must tighten lending which in turn will weaken the purchasing power of consumers plus reduce macro-economic indicators such as economic growth rates, and so on like a vicious circle.
In the current context of Indonesia after the positive era of the Corona virus, loud alarms related to the potential economic crisis must start sounding.
The tourism sector is one of the factors that play an important role in Indonesia’s economic growth and has the second largest contribution of foreign exchange in Indonesia after the foreign exchange of palm oil exports.
The tourism sector has a short-term and long-term impact on the Indonesian economy. Short-term impacts can be felt directly, while Long-term impacts can be seen by increasing national income, but with the existence of Covid-19 everything is no longer the same.
The tourism sector is now experiencing sluggishness so that purchasing power has decreased dramatically due to reduced visitor both local and foreign tourists, which automatically generated income and foreign exchange generated from the tourism sector.