Indonesian Economy Sinks to A Record Low of Minus 2.07%

JAKARTA, KOMPAS.com - The Statistics Indonesia (BPS) reported that Indonesia's economic growth in 2020 contracted by minus 2.07 percent, following three consecutive quarters of negative economic growth.

“Indonesia's economic growth in the fourth quarter for qtq [quarter-to-quarter] contracted 0.42 percent and yoy [year-on-year] minus 2.19 percent. Cumulatively [in 2020] it contracted 2.07 percent,” BPS head Suhariyanto said in a virtual press conference on Friday, February 5.

"The Indonesian economy's average gross domestic product in the fourth quarter is Rp. 3.902 trillion [$277,946,093.40]. However, the contraction caused this number to fall to Rp. 2.709 trillion [$207,124,040,70]."

He noted that the Covid-19 pandemic caused Indonesia to slide into a lingering recession, namely by hitting economic supply and demand.

Also read: Opinion: Indonesia's Unorthodox Vaccination Strategy Puts the Economy First

"Indonesia is still experiencing a recession after the economy contracted over the past two months, namely by 5.32 percent and 3.49 percent," he added.

"This is in line with the government's projection, which estimates economic growth throughout 2020 to range from 1.7 percent to 2.2 percent."

Although Suhariyanto noted that the country's economic performance picked up compared to the third quarter of 2020, economic progress is still weak.

He also said that many countries in the world are experiencing the same trend, except for China, which has seen its economy grown by 6.5 percent in the fourth quarter of 2020.

Also read: Indonesia Economy to Contract 1.5 Percent Next Year Due to Covid-19

“Other countries trading partner countries such as the United States, which is Indonesia's second export destination country, still contracted 2.5 percent of the fourth quarter's economic growth," asserted Suhariyanto.  

"Singapore's economy has contracted by 3.8 percent, as did South Korea, Hong Kong and the European Union.” 

The Covid-19 pandemic induced economic recession is the first to be experienced by Indonesia since 1998, when the country was hit by the monetary crisis. Back then, the economy contracted at minus 13.16 percent.

This caused the rupiah, which closed at Rp4,850 per US dollar in 1997, to slide rapidly to a level of around Rp17,000 to the US dollar in January, 1998.

The Indonesian economy began to recover in 1999, a year after the ousting of former strongman Suharto's New Order government. The economy has grown at an average rate of five percent over the next 20 years until it was struck down by the Covid-19 pandemic. 

(Writer: Mutia Fauzia | Editor: Erlangga Djumena, Ambaranie Nadia Kemala Movanita)

Sources:

https://money.kompas.com/read/2021/02/05/103711626/ekonomi-indonesia-minus-207-persen-rekor-terendah-sejak-1998?page=all#page2.    

https://money.kompas.com/read/2021/02/05/093418926/bps-pertumbuhan-ekonomi-ri-2020-minus-207-persen