Passengers wearing protective face masks at the Tanah Abang railway station in Jakarta, Indonesia, on August 18, 2020.
Adek Berry | AFP | Getty Images
SINGAPORE – Indonesian stocks plunged nearly 1% on Thursday after the capital Jakarta announced it would reinstate partial lockdown measures to slow the spread of coronavirus.
The decline in the benchmark Jakarta Composite Index was in contrast to the rise seen in most markets in the Asia-Pacific. The index has been the worst performer in the region this year as well, falling more than 1% on Wednesday, compared to 2.3% in the former MSCI All Country Asia’s Japan index near Wednesday.
Thursday’s reduction Jakarta Governor Anis Basved said he would impose a massive curfew from next Monday as the increase in Kovid-19 cases risked drowning the city’s health system. Jakarta was placed under a partial lockdown from April, but measures starting in June were relaxed.
According to Reuters, the re-imposition of sanctions would be similar to those imposed earlier, such as temporarily closing offices except in “essential” areas, restricting public transport services and banning meals in restaurants.
Jakarta, a city of more than 10 million people, is the epicenter of the Kovid-19 outbreak in Indonesia, which accounts for about a quarter of the country’s infections. More than a thousand new cases are reported every day in most cities this month, according to government figures.
The Philippines ranks second in Indonesia with more than 200,000 reported cases in Southeast Asia, but the region has the highest death toll at more than 8,000, according to figures compiled by Johns Hopkins University.
Helmy Armaan, an economist at City Research, said the plan to tighten Jakarta’s sanctions could “re-lead” risks to Indonesia’s macroeconomic and financial sector. “
“The economic impact of rescheduling sanctions will depend on the details of the program as well as how strictly the new rules are enforced on the ground,” he wrote in a note on Wednesday.
Indonesia’s economy, Southeast Asia’s largest, has been hit hard by the epidemic. Its gross domestic product fell 5.3% in the second quarter from a year earlier – the first economic contraction since 1999.
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