Institute for Research on Economics and Society – Faculty of Economics and Business – University of Indonesia

MACROECONOMIC ANALYSIS SERIES: Indonesia Economic Outlook, Quarter-III 2020

It has been five months since the first case of Covid-19 was announced in Indonesia in early March. The massive spread of the virus has had a huge impact, not only on human health but also on the economy. Various preventive policies, such as restrictions on travel between regions and social restrictions, have had an impact on almost all economic sectors. Disruption during the pandemic was reflected in lower-than-expected economic growth in Q2020 2,97 of 3,5%, compared to consensus of around 4,0-2020%. The main contributors to GDP, such as the manufacturing sector, wholesale and retail trade, construction, and the mining and quarrying sector, which cumulatively account for more than half of total GDP, experienced contraction in the first quarter of 2,84. At the same time, household consumption fell to only 5,01%, well below the XNUMX% growth recorded in the same period last year. Disruptions in domestic demand are reflected in reduced growth in almost all consumption subsectors.

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