The Asian Development Bank (ADB) forecasts that Indonesia’s economy will contract by 1 percent in 2020 as a result of the coronavirus pandemic, the media reported.
The bank also forecasts that economic activities will pick up next year and Indonesia’s economic growth would reach 5.3 percent in 2021.
ADB made the announcement in its supplement of its annual flagship economic publication, the Asian Development Outlook (ADO) 2020 released in the month of April.
ADB Country Director for Indonesia Winfried Wicklein said in a press release, “The COVID-19 pandemic has caused significant economic disruption globally and in Indonesia, with adverse impact on jobs and livelihoods, especially among the most vulnerable segments of society.”
According to media reports, Indonesia’s economy declined by 3 percent year-on-year in the first quarter of 2020.
Domestic consumption also dropped by 2.8 percent as households reduced discretionary spending. Meanwhile government consumption expenditure, on the other hand, showed signs of a gradual pickup as the government announced stimulus packages to help its citizens deal with the pandemic.
The bank further predicts that the overall growth of the Asia Pacific region would be around 0.1 percent in 2020. Earlier, it precited the region to witness a growth rate of 2.2 percent.
Economic activity in other countries in Southeast Asia such as the Philippines would also contract by 3.8 percent and Thailand by 6.5 percent, the bank said.
The World Bank also predicts that the global economy will shrink by 5.2 percent this year due to the pandemic. It predicts growth in East Asia and Pacific will fall to 0.5 percent in 2020.