National Economic Growth Impacted by COVID-19 in Q2/2020 - Bank Sentral Republik Indonesia
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September 18, 2020

No.22/55/DKom

The COVID-19 pandemic adversely impacted national economic growth in Indonesia during the second quarter of 2020. Consequently, Indonesia’s economy contracted 5.32% (yoy) in Q2/2020 period after expanding 2.97% (yoy) in Q1/2020. The recent contraction is consistent with global economic weaknesses stemming from the COVID-19 pandemic as well as containment measures in the form of large-scale social restrictions to break the domestic chain of transmission. Through its policy mix, Bank Indonesia will continue to strengthen synergy with the Government and other relevant authorities in order to ensure the effectiveness of various policies implemented to build economic recovery momentum.

Domestic economic growth has declined across all GDP components from the expenditure side. Household consumption contracted 5.51% (yoy) compared with positive 2.83% (yoy) in the first quarter of 2020. Likewise, investment posted an 8.61% (yoy) contraction, down from 1.70% (yoy) in the previous period. Muted government stimuli in line with seasonal trends have also fed through to a 6.90% (yoy) contraction of government consumption, falling steeply from 3.75% (yoy) in the first quarter of 2020. In addition, exports experienced an 11.66% (yoy) contraction in the reporting period due to the shrinking global economy and sliding international commodity prices. Mirroring domestic demand and exports, imports recorded a 16.96% (yoy) contraction in the reporting period.

All economic sectors experienced a contraction in the second quarter of 2020, excluding Information and Communications; Water Supply; Health, Education and Financial Services; as well as Agriculture. Economic moderation has primarily been driven by Transportation and Storage, Trade and Accommodation, as well as Manufacturing. In contrast, the Information and Communications sector posted stronger growth in line with greater uptake of digital media in response to Work From Home (WFH) and School From Home (SFH) protocols. Furthermore, the Agricultural sector has been boosted by the ongoing harvesting season. 

Jakarta, 5th August 2020
Head of Communication Department
Onny Widjanarko
Executive Director

Information about Bank Indonesia
Tel. 021-131, Email: bicara@bi.go.id

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