Indonesia’s Journey to

Economic Recovery

M. Chatib Basri

University of Indonesia
 2

Table 1. GDP growth in 2020 and projection

2020 IMF 2021 Projections 2020 IMF 2021 Projections

ASE
AN
Indonesia -2.1 4.3 Vietnam 2.9 6.5
Singapore -5.4 5.2 Lao -0.6 4.6
Malaysia -5.6 6.5 Cambodia -3.1 4.2
Philippines -9.5 6.9 Myanmar 3.2 -8.9
Thailand -6.1 2.6 Brunei Darussalam 1.2 1.6
A s ia
China 2.3 8.4 Japan -4.8 3.3
India -8.0 12.5 South Korea -1.0 3.6
P a c ific
Australia -1.1 4.5 New Zealand -2.9 4.0
E u ro p e
UK -9.8 5.3 Germany -4.9 3.6
Sweden -2.8 3.1 Netherland -3.7 3.5
France -8.2 5.8 Italy -7.8 4.2
N o rth A m e rica
USA -3.5 6.4
Source: World Economic Outlook as of April 2021
 Gross Domestic Product growth (y.o.y GDP Growth by expenditure
15,00
6,00
5,06 5,05 5,01 4,96 10,00 9,76
8,23
4,00
5,25
5,00 5,03
5,02
5,06 5,18
4,55
5,05 5,01
5,01
4,21 4,97
4,96
4,08
2,97 3,77
2,83
2,97
0,99 1,70 1,76
2,00 0,00 0,12 0,50
-0,38 0,36
-1,46 -1,84 -2,19
-3,62 -3,61

04 9

05 9

06 9

07 9

08 9

09 9

10 9

11 9

12 9

01 9

02 0

03 0

04 0

05 0

06 0

07 0

08 0

09 0

10 0

11 0

12 0

0
-4,05

01

01

01

01

01

01

01

01

01

01

02

02

02

02

02

02

02

02

02

02

02

02
-3,49
-5,00

/2

/2

/2

/2

/2

/2

/2

/2

/2

/2

/2

/2

/2

/2

/2

/2

/2

/2

/2

/2

/2

/2
-5,52
-5,32
-6,15

03
0,00 -6,47 -6,73 -6,90 -6,48 -7,21
-8,34 -7,90 -8,61
-10,00
-12,02 -11,66
-2,00 -13,52
-2,19 -15,00
-18,29
-3,49 -20,00
-4,00
-23,00
-25,00
-5,32
-6,00 Gross Domestic Product: SNA 2008: 2010p Household Consumption
Government Gross Fixed Capital Formation
Export of Goods and Services Import of Goods and Services

Household Consumptions Investment

10,00 15,00
7,15 7,35 7,86
5,00 5,64
5,54
5,32 6,30
6,25 5,79 6,17 10,00
5,12
4,48
4,38
5,20
5,07
4,89
4,75 5,06
4,54
4,59
3,98
5,08
4,95
4,37
3,73
5,01
4,32 8,40 7,18 7,79
2,44 2,02
2,36 2,05
1,82 5,00
0,00 -0,73 -0,69
0,64
0,71
-1,39
-1,69 0,00
-3,30 -4,09 -2,86

03/ 2019
04/ 2019
05/ 2019
06/ 2019
07/ 2019
08/ 2019
09/ 2019
10/ 2019
11/ 2019
12/ 2019
01/ 2020
02/ 2020
03/ 2020
04/ 2020
05/ 2020
06/ 2020
07/ 2020
08/ 2020
09/ 2020
10/ 2020
11/ 2020
12/ 2020
-5,00 -4,29
-5,14
-5,00 -3,92
-7,28 -7,57
-10,00 -9,45 -10,00
-10,94
-11,56
-12,86
-15,00 -15,00
-15,33
-16,53
-20,00
-20,00 -21,01
-25,00
Household: F&B, Other than Restaurant Household: App, Footwear & Maintenance
-30,00
Household: Equipme nts Household: Health & Education
-35,00
Household: Transportation & Comm Household: Restaurant & Hotel
-40,00
Buildi ngs & Structures Machine & Equipment Vehicles Other Equipments

Source: BPS, CEIC (2020)

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Impact on various income group based on profession: the case of Indonesia

120.0

110.0

employee
100.0 99.7

90.0
Enterpreneur 85.6

80.0

Informal 70.9
70.0 sector

60.0
1/1/20 2/1/20 3/1/20 4/1/20 5/1/20 6/1/20 7/1/20 8/1/20 9/1/20 10/1/20

Source: OCE BMRI’s estimation

Sumber data: mutasi masuk per CIF (nasabah)
 K-Shape recovery?
 Social distancing: biased in favour towards middle-upper
income group if the govt fail to provide social protection
 Inequality:

 Redefinition of job

 Access to health, education, digital tech

 6

Percentage of Savings to Total Income

based on income group
25,0

20,0

15,0

10,0

5,0

0,0

All Rp. 1 million - Rp. Rp. 2,1 million - Rp. 3,1 million - Rp. 4,1 million - > Rp. 5 million
2 million Rp. 3 million Rp. 4 million Rp. 5 million
Ags Sep Okt
 7

Changing of Consumer Behaviour

Mandiri Spending Index

Frequency Value (Index)

111,8
107,6
106,2
104,9
102.4

92.1

PSBB I PSBB II PSBB III

Sumber: Big data Bank Mandiri

 9

World Bank 2019

 10

World Bank 2019

 11

Spending on electronics and hobbies are improving

Infected cases
increased again
Spending Index on January
2020 =100

160

140

120
105.6
101.3
100 94.2
92.7

80

60

40

20

0
1/1/20 2/1/20 3/1/20 4/1/20 5/1/20 6/1/20 7/1/20 8/1/20 9/1/20 10/1/20

Source: OCE BMRI’s estimation, Data transaksi kredit & debit BMRI
ELECTRONICS GASOLINES HOBBIES SPORTS

https://www.mandiri-research.or.id
 12

Mobility, vaccine roll out and

economic recovery
 Holiday, mobility and daily cases in Indonesia moving
14,000 average 7 days
PPKM
12,000 22 – 8 Feb
PPKM Mikro
8 feb – now
Chinese New Year
10,000 12 – 14 Feb
Christmas Holiday
24-1 Jan
Propohet’s
8,000 ascension
11 Mar
Holidayr
28 - 1 Nov
Holiday
6,000 20-23 Aug

Idul Fitri Holiday

22-25 Mei
4,000

2,000

0
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 1 1
3-2 3-2 3-2 4-2 4-2 5-2 5-2 5-2 6-2 6-2 7-2 7-2 7-2 8-2 8-2 9-2 9-2 9-2 0-2 0-2 1-2 1-2 1-2 2-2 2-2 1-2 1-2 1-2 2-2 2-2 3-2 3-2 3-2 4-2
-0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -1 -1 -1 -1 -1 -1 -1 -0 -0 -0 -0 -0 -0 -0 -0 -0
07 19 31 12 24 06 18 30 11 23 05 17 29 10 22 03 15 27 09 21 02 14 26 08 20 01 13 25 06 18 02 14 26 07

Source: ourworldindata.org
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Correlation between Vaccinne roll ot dan Retail and

recreation
0,000
0 10 20 30 40 50 60 70 80 90 100

-5,000

-10,000 y = 0,2065x - 29,266

R² = 0,8025

-15,000

-20,000

-25,000

-30,000

-35,000
10
NEGARA
DENGAN
VAKS INAS I
TERTINGGI

(Termasuk negara
produsen vaksin)
3

15
INDONES IA
TERTINGGI

KE- 4

(Di antara negara non-

produsen vaksin)
4

16
 17

Vaccine roll out induce mobility

Mobility and Spending Index

Indeks nilai belanja vs Indeks Google Community Mobility Indeks nilai belanja vs Indeks Google Community Indeks nilai belanja vs Indeks Google Community Mobility
(RETAIL & RECREATION) Mobility (GROCERY & PHARMACY) (RESIDENTIALS)
120 120 120
110 110 110
f(x) = 1.22 x + 106.33 100 f(x) = 1.57 x + 90.22 100 100 f(x) = − 3.07 x + 110.06
R² = 0.71 R² = 0.72 R² = 0.73
90 90 90
80 80 80
70 70 70
60 60 60
50 50 50
Retail & Recreation Grocery & Pharmacy Residentials
40 40 40
-45 -40 -35 -30 -25 -20 -15 -10 -5 0 -25 -20 -15 -10 -5 0 5 10 15 0 2 4 6 8 10 12 14 16 18

Indeks nilai belanja vs Indeks Google Community Mobility Indeks nilai belanja vs Indeks Google Community Mobility
(PARKS) (TRANSIT STATIONS)
120 120
110 110
f(x) = 0.83 x + 111.6
100 R² = 0.78 100
f(x) = 1.17 x + 100.26
R² = 0.7 90 90
80 80
70 70
60 60
50 50
Parks Transit Stations
40 40
-40 -35 -30 -25 -20 -15 -10 -5 0 5 -70 -60 -50 -40 -30 -20 -10 0

Sumber: Big data Bank Mandiri, Google Community Mobility Reports, diolah.

Mandiri Institute
 19

Vaccine nationalism and global

recovery
 Prisoner’s dilemma

 Global Cooperation
 20

External sector: weak


Why do we need fiscal Real challenge will be in 2021: will private

expansion? investment kick in in 2021?
ACCUMULATED RESPONSE TO GENERALIZED ONE SD INNOVATIONS Economics of scale: with health protocol in

0.02 place, difficult to achieve Break Even Point
0.018 (Hotel 46%; Restaurant 68%; Retail
0.016
FMCG 32%, non FMCG 42%; Cement
0.014
industry 54%)
0.012

0.01
Vaccine ? Will take some time : 181.5 mil

0.008
1000.000 shots per day.
0.006 Consumption vs investment; consumption

0.004 will induce investment
0.002
Fiscal stimulus as a jump start
0
Q1 Q2 Q3 Q4 Fiscal: extend cash transfer (BLT) to lower

Investment to PC PC to Investment middle income
National Economic Recovery Program

Impulse Response Function
(PEN): Health; credit guarantee, interest
rate subsidy, tax incentive
 21

Economic policy response and the

way ahead
 22

Tantrum without tapering

 Global economic recovery in uneven

 China and US take lead

 Recovery in the US: Vaccine roll out is expected to be

completed 4 July 2021
 Raising yield US treasury

 Capital out flow

 Financial Market

 Policy Response: interest rate, exchange rate,

macroprudential, fiscal measures
 23

Exit Strategy
 Fiscal

 Moneter
 24

Thank you