JAKARTA (Jakarta Post/ANN): Indonesia’s economy is expected to contract sharply in the second quarter this year as trade data show that both exports and imports nosedived in May amid a coronavirus-induced global economic slowdown.
Economists on Tuesday have warned that falling imports in all goods categories point to lower demand and weaker manufacturing activities as well as investment, which will have a severe impact on the economy. Household spending and investment account for more than 70 per cent of Indonesia’s gross domestic product .
Exports, meanwhile, fell 28.95 per cent yoy in May to US$10.53 billion, their lowest level since July 2016, due to reduced shipments of coal, coffee, palm oil, as well as oil and gas. “The data is surprising, as fell more than expected, ” said Mirae Asset Sekuritas Indonesia economist Anthony Kevin in a phone conversation on Monday.
“The government’s fiscal policy is crucial to prevent a more severe economic contraction, ” Bank Central Asia chief economist David Sumual said. “Recovery in trade activities will largely depend on the trajectory of the virus and whether there will be a second wave in Indonesia or in its trading partners, ” he said.
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