The International Monetary Fund (IMF) positively assesses policy synergy in Indonesia in the face of the COVID-19 pandemic, including pandemic control policies in the health sector, fiscal stimulus policies, accommodative monetary policies, easing macro and macro-prudential policies, and Bank Indonesia's burden-sharing policies with the government.

In the 2020 Article IV Consultation report released on Wednesday (3/3), the IMF's Board of Directors views that the Indonesian authorities have pursued a strong and rapid policy mix to sustain economic recovery.

Bank Indonesia welcomes the IMF's assessment of the Indonesian economy for its appreciation and positive notes on several macroeconomic field policies.

First, the authority's commitment to gradually returning the fiscal deficit's upper limit to 3% by 2023. Second, the implementation of accommodative monetary policy while taking into account the inflation rate, through the policy of low-interest rates and the purchase of SBN by BI on extraordinary conditions at this time. Third, structural reform efforts are continuing by implementing the omnibus law and developing infrastructure to support economic recovery.

The IMF assesses that Indonesia has handled the pandemic with a bold, comprehensive, and coordinated policy synergy response. Also, Indonesia's maintained economic resilience is considered a reflection of sound macroeconomic policies since before the pandemic.

In its report, the IMF projects that Indonesia's economy will continue to improve in 2021, along with implementing the COVID-19 vaccination program and a coordinated policy strategy.

The IMF looks at risk factors that need attention given that the current condition is still fraught with uncertainty, namely risks related to the COVID-19 pandemic, which could last longer, potential vulnerabilities in the banking sector and non-financial corporations related to asset quality when normalization of policy support is carried out, and tightening of global financial conditions.

Also, there is a risk of climate change that could again disrupt the economy and increase the fiscal burden.