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SINGAPORE – Indonesia’s shares fell by more than five% on Thursday to its lowest point in nearly 3 months following the announcement that the capital, Jakarta, will restore partial blockade measures to curb the spread of coronavirus.
The fall in the Jakarta Composite Index contrasts with gains in Asia-Pacific peak markets. The index has also been one of the worst results in the region so far this year, with a drop of more than 22% at Thursday’s close, compared to about 1% in the MSCI All Country Asia index outside Japan.
Thursday’s fall came a day after Jakarta Governor Anies Baswedan announced that he would re-impose large-scale mobility restrictions starting next Monday, as an increase in Covid-19 instances threatens to overwhelm the city’s fitness system, Reuters reported. partial blockade since April, but the measures were relaxed since June.
The restrictions to be restored will be similar to those imposed in the past, such as the temporary closure of offices with the exception of “essential” sectors, the limitation of public transport and the prohibition of eating in restaurants, according to Reuters.
Jakarta, a city of more than 10 million people, has been the epicenter of Indonesia’s Covid-19 epidemic, accounting for about a quarter of the country’s accumulated infections. The city reported more than 1,000 new cases during the maximum this month, according to government data.
The more than 200,000 cumulative cases reported in Indonesia are the time in Southeast Asia after the Philippines, however, the country’s death toll of more than 8,000 is that of the region, according to knowledge compiled through Johns Hopkins University.
Helmi Arman, an economist at Citi Research, said Jakarta’s plans to tighten restrictions can simply put “Indonesia’s macroeconomic and monetary dangers back in the spotlight. “
“The economic effect of any tightening of the restrictions will have the main points of the program and the rigour with which the new regulations are implemented on the ground,” he wrote in a note Wednesday.
Indonesia’s economy, the largest in Southeast Asia, has been hit hard by the pandemic and its gross domestic product fell by 5. 3% at this time in a quarter until a year ago, the first economic downturn since 1999.
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