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Jakarta Post

H2 of 2020: Hoping for one engine to revive economic growth

  • Andry Asmoro


Jakarta   /   Wed, August 12 2020   /  01:00 am
Illustration of economic growth(Shutterstock/Number1411)

As expected, Indonesia’s economic growth contracted 5.3 percent in the second quarter, following significant deceleration in the previous quarter. It was lower than our forecast of a 6.1 percent contraction but higher than the market consensus. Most of the contraction came from sectors that have been hit heavily by the COVID-19 pandemic as well as the large-scale social restrictions (PSBB), such as transportation, retail and wholesale trade. On the flip side, positive support came from the shift of the rice harvest season from Q1 of 2020 to Q2 of 2020, this was one the reasons why 1Q20 performance was unexpectedly lower than most of the forecasts. The harvest shift drove a 2.19 percent year-on-year (yoy) increase in the agriculture sector, which contributes around 15 percent of Indonesia’s GDP. It is worth noting that manufacturing and agriculture are the biggest contribut...