Amid the threat of contraction in the world economy due to the COVID-19 pandemic, the good news is coming for Indonesia. Based on data on the Gross Domestic Product-Purchasing Power Parity of the World Bank and the International Monetary Fund (IMF), Indonesia is predicted to become the fifth-largest economy in the world.
Head of the Fiscal Policy Agency at the Ministry of Finance Febrio Kacaribu said, based on data from the two institutions, there will be a shift in the composition of the world’s largest economy in 2024. Asia will increasingly dominate the top five positions shifting the positions of several European countries.
“After China and Japan are currently in the top five, Indonesia and India are predicted to replace Britain and Germany,” he said, Wednesday, July 22.
Febrio said one of the reasons behind this shift in economic dominance was the growth of the middle class in Asia. In addition, the demographics also contributed positively to the shift in Asian economic domination.
“Hard work in handling COVID-19 2020 will greatly determine recovery in the following years,” he said.
According to the World Economic Forum, at a time when China is predicted to continue to slow down as its population is aging, Indonesia, the Philippines, and Malaysia are expected to become champions of the Asian economy. This is triggered by the motor of growth in the form of an increase in the workforce.
The estimate for the composition of the largest economy in the world uses a comparison of the projection of economic growth in the next few years, including 2020, and the process of economic recovery in the following years.
“Based on World Bank and IMF projections, several countries with the largest GDP in 2020 are predicted to experience negative growth, such as the US minus 6.1 percent YoY, Japan minus 6.1 percent, Germany minus 7.8 percent, and Brazil minus 8, 0 percent, “he said.
Read more: Indonesia’s Economy Maintains Steady Growth
Economic Growth 2020
Meanwhile, the predicted economic growth in 2020 for Asian countries is also very low, in fact, three countries are predicted to grow negatively, namely Malaysia minus 3.1 percent annually, Thailand minus 5.0 percent, and the Philippines minus 1.9 percent.
“Even though it is better than other Asian countries, Indonesia and China are also depressed by the economic growth of 0.0 percent and 1.0 percent year on year,” he explained.
According to Febrio, this prediction should be grateful and treated as a motivation for Indonesia. The government must continue to carry out the right policies in the context of handling the COVID-19 pandemic and restoring the national economy.
“Thus, it is hoped that the impact of the crisis can be minimized, the economy will soon revive, and Indonesia can continue to realize its aspirations to become a large and advanced economy in the world,”