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The Lowest Since 1999, Indonesia's Economy Growth In The Second Quarter is Minus 5.32%

Wednesday, 05 August 2020

The Lowest Since 1999, Indonesia's Economy Growth In The Second Quarter is Minus 5.32%

JAKARTA. The Central Statistics Agency (BPS) announced indonesia's economic growth based on Gross Domestic Product (GDP) in the second quarter of 2002 recorded minus 5.32% year on year.  

This economic growth rate was the lowest since the first quarter of 1999, which at the time experienced a contraction of 6.13%. Meanwhile, in the first quarter of 2020, the Indonesian economy could still grow positively 2.97% year on year.

This realization figure is much worse than the government forecast, which predicted economic growth in the second quarter would be at -3.1%. 

Head of BPS Suhariyanto said that the contraction that occurred in the second quarter of 2020 was the impact of the Corona Virus Disease 2019 (Covid-19) pandemic. "The Covid-19 pandemic has caused a domino effect from health problem to social and economic problems, and its impact has hit all levels of society, from MSMEs, households and corporations," said Suhariyanto, Wednesday (5/8) in Jakarta.

Contraction in the second quarter of 2020 occurred in almost all busines sectors. Among 17 existing business sectors, only seven that are still growing despite they are slowing down, except for the information and communication sectors which are growing better.

The largest contraction rate was experienced by the transportation and warehousing sector by 30.84% ??and the provision of accommodation and food and drink at 22.02%. The processing industry, which had the largest share in the economy, contracted by 6.19%.

Meanwhile, almost all components of GDP also contracted. Household consumption which contributed the largest contracted by 5.51%, expenditures for The Non-Profit Institutions Serving Households (LNPRT) contracted 7.76%, government consumption contracted 6.90%, Gross Domestic Fixed Capital Formation (PMTB) or investment  contracted 8.61%, export contracted 11.66% and import contracted 16.96% (see table).

Component Growth Source of Economic Growth
Household Consumption -5,51% -2,96%
LNPRT Expenditure -7,76% -0,10%
Government Consumption -6,90% -0,53%
PMTB -8,61% -2,73%
Export of Goods and Services -11,66% -2,30%
Minus Import of Goods and Services  -16,96% -3,03%
GDP -5,32% -5,32%

BPS considers that in order for economic growth to improve again in the third quarter, the government must focus on boosting the household consumption and investment sectors. Because these two components give the largest share in the GDP structure.
 



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