Indonesia's financial system stability normal in Q2: minister

JAKARTA, Aug. 6 (Xinhua) -- The Indonesian Financial System Stability Committee saw that the stability of the country's financial system in the second quarter of 2020 was normal but awareness should be raised amid COVID-19 pandemic, according to the finance minister as quoted by the State Secretariat here Thursday.

Finance Minister Sri Mulyani Indrawati along with the top executives of the committee members, namely the central bank Bank Indonesia, the Financial Service Authority and the Deposit Insurance Institution made the remarks on a virtual press conference on Wednesday.

"The COVID-19 pandemic has caused the economic growth both at provincial and national levels to undergo contraction, and the correction in the global and national economic growth has been seen in the second quarter," the finance minister said.

The minister pointed out that the possible second wave of COVID-19 in different countries which have opened their economic activities, among other factors, have created uncertainty in the national and global economic activities.

Various international institutions have made sharp revisions on the global economic projection, she said.

The International Monetary Fund (IMF) predicted that the global economic growth would contract by 4.9 percent this year, she said, adding that the World Bank would revise the global economic growth to minus 5.2 percent for 2020, and the Organization for Economic Cooperation and Development would give its projection in the range between minus 7.6 percent and minus 6 percent.

The Indonesian Central Agency of Statistics announced on Wednesday that the country's economic growth in the second quarter contracted by 5.32 percent, compared to a 5.05-percent growth in the same period last year.

Such a condition was influenced by the steep decline in the economic activities in April and May. However, the committee saw improvement in June and hoped it could be maintained in the third quarter.

"The measures taken by the fiscal and monetary authority especially in the financial sector by the Financial Service Authority and the Deposit Insurance Institution are paying attention to the economic dynamism and possible impacts on the stability of our financial system," the minister said.

Besides analyzing the existing data, the committee should also continue to formulate and design policies on efforts to minimize negative impacts of the COVID-19 on the economic activities and the financial sector, she said.