National economic growth maintained recovery momentum in the fourth quarter of 2020.  Based on data from BPS-Statistics Indonesia, economic growth in Indonesia recorded a shallower -2.19% (yoy) contraction in the fourth quarter of 2020, improving from -3.49% (yoy) in the third quarter of 2020.  A fourth-quarter improvement was recorded across nearly all demand-side components and economic sectors.  Therefore, national economic growth in Indonesia contracted 2.07% in 2020.  Looking forward, domestic economic growth, which improved through to the end of 2020, is projected to gradually gain momentum in 2021.  Bank Indonesia has oriented its accommodative policy mix towards supporting the national economic recovery, while strengthening synergy with the Government and other relevant authorities.

Domestic economic improvements in the fourth quarter of 2020 were supported by stimulus realisation and a positive external sector contribution.  Government consumption expanded 1.94% (yoy) in 2020 due to the realisation of government stimuli, dominated by social assistance disbursements, other goods and services expenditure as well as regional transfers and village fund disbursements.  Meanwhile, household consumption growth recorded a shallower -3.61% (yoy) contraction in the fourth quarter of 2020 compared with -4.05% (yoy) in the previous period in response to greater public mobility.  Annually, household consumption contracted 2.63%.  Investment growth also experienced a slightly shallower -6.15% (yoy) contraction in the reporting period compared with -6.48% (yoy) in the previous period, bringing the decline for the year in 2020 to negative 4.95%.  On the other hand, net exports enjoyed a positive position as export performance improved in line with economic recovery momentum in several of Indonesia's major export destinations amidst comparatively subdued import performance.

Most economic sectors recorded incremental gains in the fourth quarter of 2020.  Sectors associated with healthcare as well as work-from-home and school-from-home activities continued to improve and maintained positive growth, including Information and Communication as well as Health Services.  In addition, Agriculture and Education also recorded positive growth, while the Manufacturing Industry and Trade, accounting for large economic contributions, improved to experience shallower contractions.

Jakarta, 5th February 2021

Head of Communication Department

Erwin Haryono

Executive Director

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