Indonesia officially recession, Sri Mulyani: third quarter economy may less than 2.9 percent

Bisnis.com, JAKARTA – Indonesia entered a recession zone after Finance Minister Sri Mulyani Indrawati revealed the projection of economic growth for the third quarter of 2020, which is estimated to be minus 2.9 percent – minus 1.0 percent.

This figure is revised from the previous projection of minus 1.1 percent to a positive 0.2 percent.

“Latest as of September 2020, minus 2.9 percent – minus 1.0 percent. Negative territory in the third quarter will take place in the fourth quarter,” Sri Mulyani said during an APBN virtual press conference in September, Tuesday (22 / 9/2020).

He explained that from the demand side, in the third quarter of 2020, household consumption is still forecast to be in the contraction zone, which is from minus 3 percent to minus 1.5 percent, with our perspective total for 2020 consumption in the contraction range of minus 2.1 percent to minus 1 percent.

“For government consumption in the third quarter due to the extraordinary acceleration in spending, it was very positive, up 17 percent,” he said.

Meanwhile, the increase in government consumption performance was driven by spending or expansion policies as a countercyclical method.

The investment is slightly better, although still weak. This is reflected in the indicators for construction activity, imports of capital goods and sales of commercial vehicles.

“The improvement in economic activity continues to slow down, which makes investment wait and knowme.”

Sri Mulyani sees that tourism activity remains low, thus putting pressure on the hotel and transport sector.

Details below panorama economic growth indicators in the third quarter of 2020:

– Household consumption / LNPRT: contraction from minus 3 percent to minus -1.5 percent

– Government consumption: positive from 9.8 percent to 17 percent

– Investment / PMTB: Contraction -8.5 percent to -6.6 percent

– Exports: Contraction from -13.9 percent to -8.7 percent