Business & Economy

Indonesian economy shrinks for 1st time in more than 20 years

Jakarta, Aug 5 (efe-epa).- The Indonesian economy recorded its first quarterly decline in more than 20 years with a drop of 5.32 percent in gross domestic product (GDP) as a result of measures taken to contain the COVID-19 outbreak in the country.

The fall, recorded year-on-year in the second quarter between April and June, was announced Wednesday by Statistics Indonesia.

It is one percentage point higher than the forecast announced in mid-July by President Joko Widodo.

During the first quarter of the year, Indonesian GDP grew by 2.97 percent, ensuring the fifth-largest economy in Asia has avoided recession so far.

This is the first quarterly decline in the country’s economy since it plunged 6.13 percent in the first quarter of 1999, when Indonesia was hit by the Asian financial crisis.

Indonesia is the Southeast Asian country worst hit by the COVID-19 crisis. It has, however, not implemented strict lockdown measures and opted instead for isolating worst-affected areas.

In April, the Widodo government ordered the closure of borders and a partial lockdown of Jakarta, the city most affected by COVID-19 infections and which is in the process of gradual reopening.

Last week, Jakarta again extended its transition period for the easing of restrictions towards a new normal and full reopening as case numbers and deaths continue to rise.

Nationwide, the virus has infected more than 115,000 people, and caused 5,388 deaths.

The health authorities of the country have criticized the lack of precautionary and social distancing measures followed by the population to contain the spread of COVID-19, along with scarce mask usage.

Despite the rise in the number of cases and the postponement of a complete reopening, Widodo’s government is concerned about reviving the country’s economy.

The government has approved various financial stimulus packages totaling 695 trillion rupiah ($47.6 billion) to stimulate the economy and protect jobs, while the central bank has cut interest rates several times.

Indonesia, with its 270 million inhabitants, is the fourth most populated country in the world. EFE-EPA


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