Indonesia skyline

Indonesia GDP Q4 2020

Indonesia: GDP contracts at milder pace in the fourth quarter

GDP slid at a more moderate rate of 2.2% year-on-year in the fourth quarter of 2020, above the 3.5% contraction seen in the third quarter, as domestic lockdown measures were eased somewhat and external demand recovered slightly.

Private consumption dropped a softer 3.6% year-on-year in Q4, following the 4.0% contraction in Q3. Fixed investment also fell at a milder pace of 6.2% in Q4, up from the 6.5% contraction recorded in the prior quarter. In contrast, public consumption cooled, growing 1.8% in Q4 (Q2: +9.8% yoy), as the government’s stimulus measures waned.

On the external front, exports of goods and services dropped at a softer rate of 7.2% in Q4 (Q3: -11.7% yoy). Likewise, imports of goods and services declined at a milder pace of 13.5% in Q4 (Q3: -23.0% yoy). As a result, the external sector made a positive contribution to growth.

Commenting on the release, Nicholas Mapa, senior economist at ING, stated:

“As Indonesia records its first annual contraction since the 1998 Asian financial crisis, the path to more easing remains wide open with the rupiah stability the likely determinant for the timing of the next rate cut.”

Looking ahead, GDP is set to rebound robustly this year, spurred by recovering household and capital spending amid supportive fiscal and monetary policies, and recovering external demand. Uncertainty over the evolution of the health crisis and the rollout of vaccines clouds the outlook, however.

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest