by Ulisari Eslita
Indonesia's economy grew at its weakest pace since 2001 in the first quarter, as the coronavirus pandemic halted the business activity. Statistics Bureau (BPS) data showed the country’s gross domestic product (GDP) grew 2.97% in January-March from the same period a year earlier.
The deceleration was recorded in country’s four most significant sectors which accounted for half of Indonesia’s GDP, namely manufacturing, wholesale trade, farming, and construction. Meanwhile, household consumption, investment and government spending were the main drivers of growth during the quarter.
“All the economic sectors still grew in the first quarter despite a slowdown in economic activity due to the COVID-19 pandemic. This is far lower than many projections as uncertainties surrounded the economy,” BPS head Suhariyanto said on Tuesday. Earlier, the government expected the economy to grow between 4.5%-4.7% in the first quarter, while Bank Indonesia (BI) has projected GDP to expand by 4.3%.
Danareksa analyst, Helmy Kristanto predicted the economic slowdown would continue to the 2Q-2020. “With stringent measures to curb COVID-19 starting in mid-March, the overall economic trajectory will continue to trend south in 2020,” Helmy stated on his recent research. He added the festive Ramadan season, which generally boosted consumption will have less impact due to cities implement large-scale social restriction (PSBB).