Indonesia’s economy could contract between 4-4.8% in the second quarter of 2020, said Bank Indonesia (BI)’s senior deputy governor Destry Damayanti.

A corner of Jakarta (Souce: lastminute.com)

The official noted the recovery would be slower than expected as COVID-19 cases continue to rise around the country.

Indonesia’s recorded number of COVID-19 cases surpassed China’s official tally on July 18 before the country logged its highest daily death toll on 19 July.

Destry said fears of a prolonged global economic downturn had also put pressure on emerging market assets, hitting the country’s rupiah exchange rate as investors steered away from high-risk assets in favour of safe-haven assets.

Indonesia’s central bank cut its benchmark interest rate for the fourth time this year to 4 percent last week to bolster the economy and reasserted its commitment to a bond-buying programme worth 40 billion USD to rescue the economy and reduce the government’s debt burden.

Meanwhile, the Indonesian Government has allocated 695.2 trillion Rp (47.35 billion USD) to spur the economy. It expected the budget deficit to reach 6.34 percent and the economy to shrink 0.4 percent this year under a worst-case scenario or grow 1 percent in a best-case scenario.

Source: VNA