This outbreak of the COVID-19 pandemic situation really affects the whole wide world so badly. Recently, Indonesia has officially fallen into its first recession in 22 years when this Coronavirus pandemic rapidly continues to take its toll.
There would be several factors that have pushed Indonesia into a recession. There is a fall of 5.32% in the second quarter of 2020. After that, South East Asia’s biggest economy saw growth fall 3.49% in the third quarter of the year. This is such a huge fall that has ever been experiencing when compared to the same period in the year 2019.
The last time this kind of bad incident happened was during the 1998 Asian financial crisis. Due to this coronavirus downturn, authorities in Indonesia have predicted that 3.5m people living in Indonesia could lose their jobs. To make things even worse, Indonesia has the highest infection rate in the region recently.
Indonesia actually relies heavily on tourist dollars. This is because millions of foreigners fly to Bali each year. They all did this because they are in search of deserted beaches, terraced rice fields, and also sprawling Hindu temples.
To control this coronavirus infection and battle with the pandemic, Indonesia has since closed its borders to the non-residents like other countries. This has caused the number of tourists to drop sharply after that. The 3.49% fall in the economic growth during the month of July to September is slightly worse than the 3% that economists predicted.
ANZ Bank stated, “All in all, Indonesia’s economy is past its weakest point, but with the domestic outbreak not under control yet, economic activity is likely to remain under pressure”. For the solution, government officials have pledged to accelerate spending so that they can counter the pandemic’s impact and also push Indonesia’s gross domestic product (GDP) back into growth.
Sources: BBC News.