Business & Economy

Indonesia enters into recession for first time in 22 years

Jakarta, Nov 5 (efe-epa).- Indonesia, the world’s fourth most populous country and its 16th largest economy, entered recession for the first time in 22 years after a 3.49 percent fall in its gross domestic product or GDP during the third quarter of the year compared to the same period in 2019.

The country’s department of statistics announced on Thursday its quarterly macroeconomic data which reflected the economy entering into technical recession, which came after another 5.32 percent fall in GDP between April and June.

Despite the significant year-on-year decline in the economy in the third quarter, the department of statistics reported an improvement in all sectors of the economy with a combined growth of 5.05 percent between July and September compared to the previous quarter.

According to experts, the Covid-19 pandemic has dealt a severe blow to domestic consumption and business activities in Southeast Asia’s largest economy.

The authorities estimate the loss of some 3.5 million jobs due to the pandemic, which has severely affected the country as it accounts for the highest number of infections and deaths in the region.

Indonesia has so far recorded a total of 421,731 confirmed cases of the novel coronavirus, resulting in 14,259 deaths, according to the United States’ John Hopkins University.

Indonesia and the Philippines are the only countries that have not been able to flatten the curve of Covid-19 infections in Southeast Asia.

Last month, the government introduced a new legislation to reform 70 laws and regulations with the aim of creating jobs and attract investors to propel the economy.

However, the move has been opposed by several sections, including workers unions, who claim that the changes will reduce workers’ rights, affecting minimum wage and unemployment benefits as well as potentially damaging the environment with a loosening of regulations.

Last month, the International Labour Organization warned that falling global consumption of clothing and measures to check the spread of the new coronavirus have resulted in a major crisis in the textile sector, with thousands of factories being shut down in Asia and millions of workers being affected.

Indonesia, which last entered recession during the Asian financial crisis of 1998, anticipates a two percent fall in GDP in the year 2020. EFE-EPA


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