eTalk Series webinar with theme DBS Macro Economic Insights: Recovering from COVID-19, Bank DBS Indonesia presented speakers Taimur Baig, Managing Director & Chief Economist Group Research DBS Bank, and Radhika Rao, Sr. Vice President for Economics & Strategy Research at DBS Bank to provide their views on the global and Indonesia economy at a macro level in post-pandemic economic recovery.
Several interesting views:
The resilience and strength of economic recovery depends on perfecting the trade cycle, sustainable fiscal and monetary accommodation, regional coordination to reopen travel and tourism, and maintaining the best practices in pandemic management.
The election of the President of the United States (US) will cause greater liquidity demand for a few weeks, but will not change the direction of the competition between China and the US, so optimism remains that this turmoil will subside once the US presidential election is over.
The curve of economic recovery in several countries, such as the US, Europe and Japan, is flattening after a sharp spike in Q3 2020.
The successful management of the pandemic, accommodative monetary policy, and fiscal measures to support the recovery of the consumer, business and financial sectors, have been supporting the economic revival in Asia, as seen in the return of demand in China.
Indonesia still has a long road ahead in terms of pandemic management and restoring life to normalcy, and it still depends on factors such as the impact of the pandemic on the economy, management of aid funds, the objectivity of Bank Indonesia, the Financial Market, and other risk factors.
The country's GDP is expected to increase by 5.5% next year, while the fiscal deficit is predicted to continue contracting to -5.5% from -6.3%.
Other risk factors that affect Indonesia’s recovery are the delay in returning to normal activities in case of continuously rising Covid-19 cases, high participation from foreign investors in the domestic debt market, as well as fiscal health and levels of public debt, and the ratio of foreign exchange reserves to gross external financing which is relatively smaller when compared to other countries in the region.
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