The domestic and global economy in 2021 are predicted to enter the recovery stage

Jakarta, Akuratnews.com - The condition of the domestic and global economy in 2021 is predicted to enter the recovery stage although it is still slowing down because there is still the potential for a second wave as reflected in the pandemic situation which is still spreading and increasing in several countries.

Many countries have shown a slowed reopening and several other countries have partial lockdowns. Especially for China, which managed to contain the virus and recover to the pre-Covid level.

Meanwhile, the positive sentiment of the election of Joe Biden as the 46th US President sparked expectations of a better trade policy because international trade relations will be more predictable and will benefit China and countries with high export dependence such as Korea and Singapore.

Besides that, the Biden Government still supports the increase in fiscal stimulus and low-interest rates to boost its economic growth which has slumped due to the covid pandemic on the other hand it has a positive impact on the emerging market because it will encourage investors to seek higher yields there.

Here are a few excerpts from the presentations delivered by the speakers at the BNI-AM Market Outlook 2021 which was held virtually from 17 to 19 November 2020. This event was held to give appreciation and update on market developments to its customers, PT BNI Asset Management ( BNI-AM) held a Market Outlook 2021 event with the theme "Resilience to Counter Economic Turbulence".

This theme was chosen with the consideration that economic and capital market predictions in 2021 will be more challenging and volatile than 2020 so accurate and comprehensive information is needed to deal with it.

The projection of the world economy is revised to -4.4% in 2020 (IMF source), recovery is estimated to continue in the 4th quarter of this year until 2021. The policy of implementing the Covid-19 protocol so that health risks do not seem to end until the vaccine distribution period can reach all society. This prompted a downgrade of the estimated economic growth in 2021 from the previous projection to 5.2% (-0.2%) in 2021.

Interest rates are projected to remain at a low level (low rate environment), but the stimulus is still needed to encourage economic recovery to become the macro background in 2020-2021. This increases the risk of sovereign debt burden in the Emerging Market in the future. The unemployment rate will increase in 2020 and will continue in 2021 if the pandemic risk doesn't end soon, so it becomes a global supply risk in the medium term, said Putut Endro Andanawarih - President Director of BNI Asset Management in a presentation delivered as one of the speakers.

"Entering 2021, we see that domestic conditions will experience slightly higher inflation compared to 2020 as the distribution of government stimulus increases. Bank Indonesia's interest rate policy is relatively stable at the level of 3.75-4% in line with the rising inflation level, but there is still the potential for a 25-50 bps reduction in interest rates from the current level,” said Puput Endro Andanawarih, in Jakarta, Tuesday (17/17). /11).

"Projected economic growth at the level of 4-5.1% (upside risk at 6%) in 2021, driven by a gradual recovery from the re-opening economy, especially when the vaccine can be distributed. In addition, investment and exports are estimated to increase, and government spending and stimulus programs are still quite solid. The 10-year SUN yield is estimated to move in the range of 6.27 – 6.65% (risk 7.3%) supported by local liquidity and the return of foreign investors to the bond market in Indonesia,” added Putut Endro Andanawarih.

Link. https://akuratnews.com/perekonomian-domestic-dan-global-2021-diprediksi-masuk-tahap-recovery/