Indonesia’s virus-hit economy contracted in the third
quarter, plunging it into its first recession since the archipelago
was mired in the Asian financial crisis more than 20 years
ago.
Activity in Southeast Asia’s biggest economy slumped 3.49
percent on-year in July-September, the statistics agency said
Thursday, with tourism, construction and trade among the
hardest-hit sectors.
The data marked the second consecutive quarter of contraction
after a 5.3 percent decline in April-June.
Indonesia last suffered a recession 1999 during a regional
currency crisis that helped force the resignation of long-term
dictator Suharto less than a year earlier.
However, the depth of the current decline was easing, the agency
said adding it pointed to stronger figures in the last quarter of
the year.
“The recovery should continue over the coming months, but it is
likely to be slow and fitful,” Gareth Leather from research house
Capital Economics said in a research note after the data were
published.
“While Indonesia is a long way from bringing the coronavirus
under control, the number of new cases does appear to be easing.
This will allow social distancing measures to be relaxed,” he
added.
Governments around the world have been struggling to contain
coronavirus as the deadly respiratory disease forced the shutdown
of vast parts of the global economy.
Indonesia’s central bank cut interest rates several times this
year in a bid to boost the struggling economy, while the government
has unveiled more than $48 billion in stimulus to help offset the
impact of the virus, which forced a large-scale shutdown that
hammered growth.
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Several million Indonesians have been laid off or furloughed as
the vast country, home to nearly 270 million people, battled to
contain the crisis.
Covid-19 infections have topped 420,000 and more than 14,000
deaths, putting Indonesia among the worst hit Asian countries.
However, the true scale of the crisis is widely believed to be
much bigger in Indonesia, which has one of the world’s lowest
testing rates.
President Joko Widodo has been widely criticised over his
government’s handling of the pandemic as it appeared to prioritise
the economy.
Boosting annual growth above five percent had been a key
priority for Widodo in his second term, which began late last
year.
On Monday, the president signed into law a package of
pro-business bills aimed at cutting red tape and drawing more
foreign investment as he pushes an infrastructure-focused
policy.
But the controversial legislation has sparked mass protests in
cities across the nation, as activists warned it would be
catastrophic for labour and environmental protections.
AFP
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