Indonesia’s economy grew in the first quarter at its slowest pace for almost two decades, and economists warned Tuesday the coronavirus crisis would likely deal an even greater blow in the next three months.
The news comes as governments around the world struggle to contain the deadly disease, which has essentially shut down the global economy, which is expected to fall into recession this year.
Southeast Asia’s biggest economy grew 2.97% in January-February, the worst rate since 2001 and well short of the 5.07% in the same period last year. It also missed forecasts of 4% expansion, while marking a contraction of 2.41% from the previous quarter.
Statistics agency chairman Suhariyanto, who goes by one name, said in a virtual news conference: “No countries are immune to the Covid-19. Whether developed or developing countries, they were hit badly by the virus and Indonesia is no exception.”
The statistics agency pointed to a severe hit to the key tourism sector, saying only 2.6 million visitors went to Indonesia in the three months, down a third on-year.
And analysts warned of more pain ahead.
“GDP growth in Indonesia held up better than elsewhere in the first quarter, at least according to the official figures, but we doubt this resilience will last”, warned Capital Economics in a note.
“Indonesia was later than other countries to lock down its economy, meaning more of the hit will have fallen in the second quarter,” it said, adding that it expects a “large contraction” in April-June.
Officials have cut their official growth forecast to 2.3% for this year, from a previous estimate of 5.3%, and said it could even suffer a contraction under a worst-case scenario
Indonesia has banned domestic train, air and sea travel until June 1 in an effort to contain the spread of the virus, which has infected more than 11,000 people and killed 864 in the country. However, the toll is widely believed to be much higher as it has one of the lowest testing rates in the world.
The ban on sea travel could hamper the movement of millions in a country of some 17,000 islands where passenger ferries are a key mode of transportation.
The government had already called on residents of major cities, including the capital Jakarta, to stay put.