Indonesia’s GDP Contracts 2.07% in 2020, the First Decline Since 1998; Recovery Anticipated for 2021

Indonesia’s gross domestic product (GDP) declined to 2.07% year-on-year (YoY) in 2020, according to the Statistics Indonesia (BPS). This followed 5.0% GDP growth YoY reported in 2019. Reports state that GDP fell more than expected in the fourth quarter of 2020 (4Q 2020), down 2.19% YoY – leading to Indonesia’s first full year contraction since the 1998 Asian Financial Crisis. The hardest hit sectors in Indonesia included household consumption, transportation and tourism, according to BPS data.

The contraction of 2020 was due to the financial and consumer situation caused by COVID-19, according to released reports. Suhariyanto, the Head of Statistics Indonesia, stated that apart from government spending, all sectors in Indonesia witnessed contractions in 4Q 2...