Indonesia Suffers Steepest Economic Contraction in Two Decades

(20 August 2020) New data out of Indonesia, Southeast Asia’s largest economy, reveals that during Q2 the country experienced its deepest economic contraction since the Asian Financial Crisis (1998). Another economic casualty of COVID. (Read about the 2Q economic fates of Colombia, Malaysia, the United Kingdom, and the United States.)

• Indonesia's gross domestic product contracted 5.32 percent YoY in Q2 against growth of 3 percent in Q1 2020.
• The downturn was broad based. Household spending, which contributes more than 50 percent of GDP, fell by 5.5 percent after managing growth of 2.8 percent in Q1. Investment, represented by gross fixed capital formation, decreased by 8.6 percent and government expenditure by 6.7 percent, as the government cut spending on business trips, canceled events, and hit administrative delays in executing new fiscal packages.
• The external figures faired still worse than domestic activity. Indonesia's exports plunged by 11.6 percent, while imports decreased 16.9 percent.