The country's gross domestic product grew 2.97 per cent year-on-year in the first three months of the year as household spending and investment growth slowed amid the coronavirus outbreak, Statistics Indonesia announced on Tuesday .
Four provinces and 22 regencies/cities nationwide have implemented large scale social restrictions to contain the virus spread, forcing businesses to close and hitting demand as people are required to stay at home. Government expenditure grew by 3.74 per cent in the first quarter, lower than the 5.22 per cent growth recorded in the same period last year. Exports increased by 0.24 per cent while imports contracted by 2.19 per cent as Indonesia’s major trading partners, such as China, went into lockdowns.
The government has forecast the country’s economy to expand by 2.3 per cent this year in the baseline scenario, or contract by 0.4 per cent in the worst-case scenario. “The government’s budget re-allocation must be improved to focus more on Covid-19 relief in a bid to protect households’ purchasing power,” he said, adding that the zero growth projection would translate into 5 million to 8 million people losing their jobs in the months ahead as the pandemic chokes companies’ cash flows.
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