Indonesia’s economy contracted more than expected in the fourth quarter as the Covid-19 pandemic continued to dampen exports and household consumption, data from the statistics bureau showed Friday.
Gross domestic product fell 2.19 percent year-on-year, bigger than the economists’ forecast of -2.0 percent but slower than the 3.5 percent decline posted in the third quarter.
On a quarterly basis, GDP dropped 0.42 percent, confounding expectations for an increase of 0.7 percent.
In the whole year of 2020, GDP was down 2.07 percent, the first annual contraction since the 1998 Asian financial crisis.
The expenditure-side breakdown showed that household spending dropped 3.61 percent on year, while government spending grew 1.76 percent. Gross fixed capital formation decreased 6.15 percent in fourth quarter.
Exports logged a marked decline of 7.21 percent and imports were down 13.52 percent.
Although the economy contracted at a slightly slower pace in the fourth quarter, a failure to control the virus means the recovery is likely to be slow and fitful in the quarters ahead, Gareth Leather, an economist at Capital Economics, said.
While the near-term outlook for the economy remains poor, long-term economic prospects have received a boost in recent months by faster progress on economic reforms.