Indonesia falls into recession for first time in two decades

Indonesia falls into recession for first time in two decades

GDP contracts 3.49% in Q3 as region’s largest economy fought COVID ills

JAKARTA — Indonesia fell into recession for the first time in two decades, as the coronavirus pandemic took its toll on Southeast Asia’s largest economy.

The country’s real gross domestic product plunged 3.49% in the three months ended September from a year earlier, according to data released on Thursday. The slowdown follows a 5.32% contraction in the previous quarter, plunging the archipelago into a recession — defined as two consecutive quarters of negative growth.

This is the first time Indonesia’s economy has experienced consecutive contractions since the Asian financial crisis in the late 1990s. The country then recorded five consecutive quarters of negative GDP growth from the first quarter of 1998 through the first quarter of 1999, according to data from the Organization for Economic Cooperation and Development.

The decline was steeper than the 3% contraction forecast in a Reuters poll of 23 economists. President Joko Widodo had said earlier in the week that he expected third-quarter GDP to contract more than 3%.

Household consumption, which makes up over half of Indonesia’s GDP, shrunk 4.04% year-on-year, after a steeper 5.52% fall in the previous quarter. On a quarterly basis, Indonesia’s GDP grew 5.05% in the July-September period, recovering from a 4.19% contraction.