Indonesia set for first recession in over two decades
Indonesia’s economy contracted in the second quarter for the first time in over two decades, putting it on course for its first recession since the 1999 Asian financial crisis.
Output in the region’s biggest economy slumped 5.3% on-year in April-June, according to the statistics agency.
Indonesia, which has the highest number of COVID-19 cases in Southeast Asia topping 115,000 with more than 5,300 deaths, is reeling from the economic effect of the lockdown imposed to curb the outbreak.
The government has announced a stimulus package worth more than US$48 billion to help offset the impact of the virus but it seems that is not sufficient to prevent a recession as the country is set for one of the slowest economic recoveries in the region.
“Economic activity in Indonesia collapsed in the second quarter,” research house Capital Economics said after the announcement of the figures.
“A failure to contain the virus effectively and inadequate policy support means the recovery is likely to be one of the slowest in the region,” it added.