Indonesia Economic Outlook
July 21, 2020
The economy likely contracted sharply in the second quarter due to containment measures at home and abroad. Retail sales were down around 20% in May, and the Central Bank expects a further double-digit decline in June, suggesting depressed private consumption. In addition, the manufacturing PMI was deep in contractionary territory throughout the quarter amid soft output and new orders. Moreover, administrative and communicative difficulties have hampered the rollout of the government’s USD 49 billion stimulus package, likely accentuating the downturn. While economic conditions should have improved at the tail end of Q2 and heading into Q3 thanks to the easing of social distancing restrictions in June and recoveries abroad, elevated new Covid-19 cases continue to dampen momentum, and risk the snap-back of health restrictions.Indonesia Economic Growth
The economy is expected to shrink in 2020, due to the prolonged domestic coronavirus outbreak hitting demand. However, fiscal and monetary stimulus should prop up activity somewhat. Downside risks include elevated new Covid-19 cases, which could necessitate new restrictions, and currency volatility. FocusEconomics panelists project GDP to contract 0.8% in 2020, which is down 0.4 percentage points from last month’s forecast, and to expand 5.5% in 2021.Indonesia Economy Data
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Indonesia Facts
| Value | Change | Date | |
|---|---|---|---|
| Bond Yield | 7.10 | -0.05 % | Dec 31 |
| Exchange Rate | 13,883 | 0.05 % | Jan 01 |
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Indonesia Economic News
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Indonesia: GDP records first contraction since Asian financial crisis in Q2
August 5, 2020
The economy worsened in the second quarter, with GDP contracting 5.3% on an annual basis (Q1: +3.0% year-on-year) due to Covid-19 containment measures. The downturn was broad-based, with private consumption, public spending, fixed investment and exports all contracting.
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Indonesia: Inflation falls to lowest level since May 2000 in July
August 3, 2020
Consumer prices fell a seasonally-adjusted 0.10% in July over the prior month, swinging from June's 0.18% increase.
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Indonesia: Manufacturing conditions deteriorate at softer pace in July
August 3, 2020
The manufacturing Purchasing Managers’ Index (PMI) released by IHS Markit rose from 39.1 in June to 46.9 in July amid an easing of Covid-19 restrictions.
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Indonesia: Central Bank cuts rates further in July to boost activity
July 16, 2020
At its 15–16 July monetary policy meeting, Bank Indonesia (BI) cut the seven-day reverse repo rate to 4.00%.
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Indonesia: Merchandise exports rise in June, trade balance records a surplus
July 15, 2020
Merchandise exports inched up 2.3% on an annual basis in June (May: -29.1% year-on-year) on greater non-energy exports, marking the first increase since February.
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