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ADB downgrades Indonesia’s economic prospects as slowdown persists
The ADB previously forecast Indonesia’s economy to shrink 1 percent this year and grow 5.3 percent in 2021, according to its outlook published in September.
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A 'jamu' (herbal medicine) seller crosses a bridge above the Jagorawi toll road in Cibubur, East Jakarta. Residents and
businesses have started to resume activities after the government introduced a restrictions transition policy while still urging the public to follow health protocols. (JP/PJ.Leo)
T
he Asian Development Bank (ADB) has downgraded its projections for Indonesia’s economy this year and in 2021 due to a continued slowdown in economic activity as a result of the continuing coronavirus outbreak.
The COVID-19 pandemic led to a contraction of around 3.5 percent year-on-year (yoy) in gross domestic product (GDP) in the third quarter, taking the country into its first recession since the 1998 Asian financial crisis, after a 5.32 percent contraction in the second quarter, according to data from Statistics Indonesia (BPS).
“GDP forecast in 2020 has been downgraded for Indonesia, Malaysia and the Philippines as COVID-19 containment measures have hampered economic recovery,” ADB country economist for Indonesia Emma Allen said in a virtual briefing on Thursday.
“So in light of these developments with the third quarter outcome and assuming a gradual reopening of the economy in Indonesia throughout this year and next year, real GDP growth is now projected to recover at a slower rate than we anticipated in September, contracting 2.2 percent in 2020 and picking up to 4.5 percent in 2021.”
Read also: Prolonged pandemic could derail Indonesia’s recovery, ADB, economists warn
The ADB previously forecast Indonesia’s economy to shrink 1 percent this year and grow 5.3 percent in 2021, according to its outlook published in September.
The downgraded forecast is worse than the government’s projection of an economic contraction of between 0.6 and 1.7 percent this year and growth of 5 percent in 2021.
