YAKARTA (Reuters) – Indonesia’s economy recorded the biggest contraction in more than two decades this quarter, as measures taken to combat the coronavirus pandemic affected peak sectors, a Reuters vote showed On Monday.
The median forecast of 20 analysts in the survey indicates that Southeast Asia’s largest economy will contract by 4.61% compared to the previous year, after a 2.97% expansion in the first quarter.
This would be the lowest figure since the first quarter of 1999, according to OECD data, and according to the government’s forecast of a contraction of 4.30% and the central bank’s estimate of a contraction of 4% to 4.80%.
Large-scale social restrictions in Indonesia to involve the virus epidemic appear to have maximized economic activity.
“The overall deterioration in expansion this quarter appears to have been widespread,” Nomura said in a note, leading to a drop in sales of customers’ assets, weak production productivity, weak mining activity, moderate credit expansion, and a drop in tourism.
Nomura estimates Indonesia’s economy at 6.1% at the time quarter.
“There are signs that the Indonesian economy has exceeded its weakest point, however, with the domestic epidemic not yet under control, economic activity is likely to remain under pressure,” ANZ economists said on one note, noting that public spending alone is higher and may not compensate for other weaknesses.
Indonesia reported its first new coronavirus infections in early March, but did not begin to apply significant restrictions until April.
Since then, the number of cases shown has exceeded 113,000 with more than 5,300 deaths, and the number of cases accelerated in July.
Six analysts who shared their year-round expansion projections predicted that the Indonesian economy could contract by 0.8% in 2020, with an expansion of 5.02% in 2019.
Indonesia’s Ministry of Finance expects a solid economic expansion or slight contraction by 2020.
(Survey through Nilufar Rizki in Jakarta and Shaloo Shrivastava in Bengaluru; written through Tabita Diela; edited through Fransiska Nangoy and Ed Davies)
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