According to official economic data, Indonesia, Southeast Asia’s biggest economy, has fallen into a recession during the third quarter, for the first time in more than two decades following the coronavirus ravaging its business activity.
According to statistical data, Indonesia’s Gross domestic product (GDP) has shrunk by 3.49% on an annual basis during the July-September period. During the second quarter, its economy contracted by 5.32% year-on-year.
The country has the highest COVID-19 cases and death toll in Southeast Asia. Around 3.5 million people are set to lose their jobs this year, with the central bank and the government taking action to try and soften the blow.
“Given the weak momentum from Q3, the GDP for Q4 is at risk as well and we are more likely now than before to see growth still at significant negative print of around -2% in Q4, which would push the full year GDP to -2%,” said Wellian Wiranto, an economist with OCBC.
While the Indonesian government has pledged to accelerate spending to push back the GDP into the growth bracket, the governor of Indonesia’s central bank Perry Warjiyo said, “the central bank has further room to act after 100 basis points of rate cuts and more than $30 billion of government bond purchases, including in the primary market.”
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