National Economy 2020

In 2020, Indonesia’s economy and even the world are being hit by tremendous obstacles due to the Covid-19 pandemic. The economies of several countries and bilateral cooperation relations are significantly disrupted. The pandemic greatly affects activities related to large and mobility personnel or communities.

Based on the average growth until Q3/2020 (y-o-y), PT VISI predicts that in 2020 Indonesia’s economy will grow by -1.97%. This figure is based on Indonesia’s average economic growth up to the 3rd quarter of 2020 and various constraints in the previous year and was exacerbated by the pandemic Covid-19.

As the solving of the COVID-19 pandemic improves, business potential is expected to return to normal gradually, and the economy will increase sharply. Based on this, PT VISI predicts that economic growth will increase to 4.69% in 2021. The estimated figure will still lower than in 2019 before the pandemic because there is still a recovery process in several areas caused by the pandemic.

The chart below is the information regarding the impact experienced by the industrial sector in Indonesia:

The two (2) sectors have been greatly affected by the pandemic, namely the transportation and warehousing sectors with the accommodation and food providers sector. In 2019, the average growth for these sectors was 6% and 5.6%. However, after the pandemic, in 2020, there was a very significant average decline to -15.4% and -10.64%. These sectors are considered the most affected sectors because of the large human interaction level in their operations.

Based on Statistics Indonesia (BPS) data, in early 2020, there was a decline in growth from the transportation and warehousing sector,  the accommodation and food supply industry in Q1/2020 (y-o-y), by -4.16 points and -3.92 points or to 1.29% and 1.95%. It does not stop there; the Large-Scale Social Restrictions (PSBB) regulation causes both sectors’ economies to decline sharply because most of their operations cannot be carried out. The two (2) industries experienced a more severe decline, by -36.68 points and -27.55 points or to -30.8% and 22.02%. Lack of preparation for this pandemic condition has made them fall even more painful than it should have been, fortunately, along with the adaptation to this and the existence of regulations that allow the supporting sectors amid the pandemic to continue operating, in the next quarter, the condition starts to improve, especially for the food supply sector. With an alternative to selling online, it becomes a promising business potential. Not only to overcome conditions during a pandemic but also to provide new business methods in the future. It does not close that the sector is still experiencing a decline, but there are positive changes to grow. Although not as extreme as the two sectors, other sectors also experienced a decrease in average growth amid the pandemic conditions.s

Based on the graphic of average growth above, only two (2) sectors have produced average positive change amid the COVID-19 pandemic, namely the information and communication industry and the health and social activities services sector.

By entering 2020, there is an increase in the information and communication sector’s growth and the health and social activities service sector in Q1/2020 (y-o-y), namely 0.74 points and 1.75 points or to 9.8% and 10.39%.

The information and communication sector has a significant role and a solution to overcome the community’s limited mobility due to social distancing and physical distancing regulation during the COVID-19 pandemic as it is today. Many businesses and personalities use services from this sector to stay active and communicate well. Based on this, the demand for their services continued to increase and provided positive growth amid the pandemic. In Q2/2020 (y-o-y) and Q3/2020 (y-o-y), the unresolved pandemic conditions caused the demand to continue to grow, increased by 1.23 points and 1.37 points or to 10.83% and 10.63%.

Likewise, health services’ demand amid a pandemic closely related to health will undoubtedly increase with the service sector’s health and social activities. By entering Q2/2020 (y-o-y), there was a decline in this sector’s growth by -5.42 points to 3.71%, due to the lack of operating medical personnel and the scarcity of medical equipment, resulting in limited health services. This scarcity is caused by carrying out health protocols using high medical standard equipment. So that the public widely uses the trade-in equipment that should be used by medical personnel. However, in Q3/2020 (y-o-y), there was an increase in growth again by 6.15 points to 15.33% after handling these problems.

If this pandemic can be resolved before entering 2021, VISI predicts the economic conditions will recover. Although the recovery will not occur immediately (gradually), business opportunities will still be promising, and economic activity will gradually return to normal.