Indonesia’s economy in worst shape since two decades
Indonesia’s economy, hit hard by the escalating spread of the coronavirus, in the second quarter of this year contracted for the first time in over two decades since the Asian financial crisis hit in 1997 and 1998. Efforts to contain the virus dealt a huge blow to consumer demand and business activity in Southeast Asia’s largest economy.
Gross domestic product shrank by a bigger than expected 5.32 per cent from April to June as compared to a year ago, according to data from Statistics Indonesia. Analysts’ initial expectations were a contraction of 4.61 per cent, after a growth of 2.97 per cent year-on-year in the first quarter.
The government has lowered its growth forecasts several times already and now sees GDP in a range of -0.4 per cent to one per cent for the year. The central bank has cut its own estimate to 0.9 to 1.9 per cent growth.
Massive drop in consumer spending, investments
The impact of the pandemic is fundamental, with households curbing spending and businesses delaying investments, while exports were also hit by lower global demand and commodity prices. What makes things worse is that the virus outbreak in the country – the worst in Southeast Asia in both the number of infections and deaths – shows no signs of abating and could weigh on that outlook.
Indonesia continues to record a high coronavirus death rate, higher than the global average. The country’s average mortality rate as of August 3 was 4.68 per cent, compared to a global mortality rate of 3.79 per cent.
As of August 5, Indonesia had 116,871 confirmed infections, 5,452 deaths and 73,889 patients recovered.
Indonesia’s economy, hit hard by the escalating spread of the coronavirus, in the second quarter of this year contracted for the first time in over two decades since the Asian financial crisis hit in 1997 and 1998. Efforts to contain the virus dealt a huge blow to consumer demand and business activity in Southeast Asia's largest economy. Gross domestic product shrank by a bigger than expected 5.32 per cent from April to June as compared to a year ago, according to data from Statistics Indonesia. Analysts’ initial expectations were a contraction of 4.61 per cent, after a growth of 2.97...
Indonesia’s economy, hit hard by the escalating spread of the coronavirus, in the second quarter of this year contracted for the first time in over two decades since the Asian financial crisis hit in 1997 and 1998. Efforts to contain the virus dealt a huge blow to consumer demand and business activity in Southeast Asia’s largest economy.
Gross domestic product shrank by a bigger than expected 5.32 per cent from April to June as compared to a year ago, according to data from Statistics Indonesia. Analysts’ initial expectations were a contraction of 4.61 per cent, after a growth of 2.97 per cent year-on-year in the first quarter.
The government has lowered its growth forecasts several times already and now sees GDP in a range of -0.4 per cent to one per cent for the year. The central bank has cut its own estimate to 0.9 to 1.9 per cent growth.
Massive drop in consumer spending, investments
The impact of the pandemic is fundamental, with households curbing spending and businesses delaying investments, while exports were also hit by lower global demand and commodity prices. What makes things worse is that the virus outbreak in the country – the worst in Southeast Asia in both the number of infections and deaths – shows no signs of abating and could weigh on that outlook.
Indonesia continues to record a high coronavirus death rate, higher than the global average. The country’s average mortality rate as of August 3 was 4.68 per cent, compared to a global mortality rate of 3.79 per cent.
As of August 5, Indonesia had 116,871 confirmed infections, 5,452 deaths and 73,889 patients recovered.
