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Indonesia sees gloomy outlook on economy as growth falls below 5%
Gross domestic product (GDP) grew 4.97 percent in annual terms in the fourth quarter of 2019, the weakest level in almost three years, Statistics Indonesia (BPS) announced on Wednesday.
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General image of Indonesia economy. (Bloomberg/File)
I
ndonesia’s economy headed into 2020 with sluggish outlook as household consumption, exports and investment are expected to further weaken due to global economic risks including the coronavirus crisis, economists say.
Gross domestic product (GDP) grew 4.97 percent in the fourth quarter of 2019, the weakest level in almost three years, Statistics Indonesia (BPS) announced Wednesday. Throughout 2019, Indonesia’s economy grew 5.02 percent, the weakest year since 2015.
Read also: Indonesia’s GDP growth stagnated at 5.02 percent last year, weakest since 2015
Bank Central Asia chief economist David Sumual said that gross domestic product (GDP) could be adversely affected by the impact of a spiraling coronavirus crisis, calling the government’s economic target of 5.3 percent as unrealistic.
“Economic growth below 5 percent in 2020 should not be ruled out,” David told The Jakarta Post after the GDP announcement. “The coronavirus outbreak will lower foreign investment from China and also lower China’s demand for Indonesia’s commodities.”
China is Indonesia’s largest trading partner and second largest foreign investor. Each percentage-point decline in China’s growth rate results in a 0.3 percent drop in Indonesia’s, the World Bank said in last year’s presentation material to President Joko “Jokowi” Widodo.
David said that the virus could also be seen as opportunity for the country. “Trade war between the United States and China has triggered factory relocation to Southeast Asia. It may as well continue this year.”
