Reflecting on Economic Expectations and Prospects for 2020

In line with the endogenous growth theory in terms of aggregate demand amid the pressures on export performance, consumption and investment will remain the main sources of economic growth for Indonesia in 2020.

KOMPAS/AGUS SUSANTO

Ari Kuncoro

Therefore, the behavior and cycle of spending and investment are vital to predicting the economy’s future direction. Government spending can still affect the cycles of consumption and investment, either through the multiplier effect, regulation or deregulation, and the effects of announcing a new policy direction.

Foregoing the anxiety over recession and the trade war, the political year usually has minimal impact on these economic variables. However, with the current advancements in information technology in forming expectations, negative news is usually more easily accepted and remembered longer. Meanwhile, good news requires repeated verification.