Institute for Research on Economics and Society – Faculty of Economics and Business – University of Indonesia

MACROECONOMIC ANALYSIS SERIES: BI Board of Governor Meeting, February 2020

The recent Corona virus epidemic has had an impact that could disrupt the recovery of global growth, including Indonesia. This outbreak has the potential to have several impacts on the Indonesian economy through three channels: financial markets, the real sector and the government sector. The spread of this outbreak in the short term has affected financial markets due to global investor concerns and triggered capital outflows from developing countries which threaten market liquidity and exchange rate stability. In the real sector, the impact of this epidemic is a decline in tourism & trade activities, as well as a potential slowdown in real investment. In the government sector, there could be a decrease in tax revenues and an increase in government bond yields.

 

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