World Bank: Indonesia's Forest Fires Cost Economy $5.2 Bln

The World Bank has estimated the value of the total damage and economic losses caused by forest fires in Indonesia this year at about $ 5.2 billion.

The Bank believes that this cost is equivalent to 0.5 percent of the gross domestic product (GDP).

The report bases its assessment on 8 districts affected by forest fires from June to October 2019.

The World Bank said that forest and land fires, in addition to the smoke caused by those fires, have led to major negative economic impacts, estimated at $ 157 million, as direct damage, and another $ 5 billion related to the affected economic activities.

According to official figures, more than 942 thousand hectares of forests and lands were subject to fires this year, the largest since the devastating forest fires in 2015 when the country saw the burning of 2.6 million hectares.

The World Bank predicts a fall of 0.09% and 0.05% in Indonesia's economic growth estimates for the current and next two years, respectively, due to the fires.

The bank's forecast for economic growth in Indonesia indicates a 5 percent gain for 2019 and 5.1 percent for next year.

The report pointed out that the long-term effects of repeated fires were not taken into consideration, noting that frequent exposure to fire smoke would reduce the quality of health and education in addition to damaging palm oil, which is an important commodity for Indonesia.