The finance minister said weak consumption in the upper-middle class had hindered the economic recovery and that bringing back Indonesian consumer confidence would be crucial.

“The confidence of upper-middle-class consumers in Indonesia is an important component for businesses to continue to survive and recover,” she said at a forum held by Bloomberg on Wednesday. “It is very important to restore confidence, but it will really depend on whether the pandemic can be handled or a vaccine can be distributed equally.”

Indonesia has fallen into recession for the first time since the 1998 Asian financial crisis, ending two decades of economic expansion. The economy shrank 3.49 percent in the third quarter after contracting 5.32 percent in the second quarter, making for the two consecutive quarters of economic contraction that define a recession.

Household spending, which accounts for more than half of the gross domestic product (GDP), fell 4.04 percent – less than the 5.52 percent contraction booked in the second quarter – led by a slump in transportation, restaurant and hotel spending as COVID-19 limited social activity.

Indonesian consumers also became more pessimistic in September. The Bank Indonesia (BI) consumer confidence index weakened to 83.4 in September from 86.9 in August. An index above 100 reflects general hopefulness, while a value below 100 signifies pessimism.

Consumer expectations about business expansion, job availability and income over the next six months weakened, according to the survey.

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