Indonesia’s economy contracted in the third quarter, plunging it into its first recession since the archipelago was mired in the Asian financial crisis more than 20 years ago.
Activity in Southeast Asia’s biggest economy in the July-to-September period slumped 3.49 percent from a year earlier, Statistics Indonesia said yesterday, with tourism, construction and trade among the hardest-hit sectors.
The data marked the second consecutive quarter of contraction after a 5.3 percent decline in the April-to-June period.
Photo: AFP
However, the depth of the current decline was easing, Statistics Indonesia said.
The economy “continues showing a contraction year-over-year, but the quarter-on-quarter recovery was quite strong,” said Anwita Basu, head of Asia Country Risk at Fitch Solutions in Singapore, highlighting a gradual pickup in manufacturing. “Some government efforts to continue with public works are reflected in that.”
Indonesia’s economy was also in better shape than two decades ago, with once-troubled commercial banks now stronger and ample foreign currency reserves at the central bank, Basu said.
Governments around the world have been struggling to contain the COVID-19 pandemic, which has forced the shutdown of vast parts of the global economy.
Bank Indonesia cut interest rates several times this year in a bid to boost the struggling economy, while the Indonesian government has unveiled more than US$48 billion in stimulus to help offset the impact a large-scale shutdown amid the pandemic that hammered growth.
Several million Indonesians have been laid off or furloughed as the vast country, home to nearly 270 million people, has battled to contain the virus.
Indonesian President Joko Widodo has been widely criticized over his government’s handling of the pandemic, as it appeared to prioritize the economy.
Boosting annual growth above 5 percent had been a key priority for Widodo in his second term, which began late last year.
On Monday, the president signed into law a package of bills aimed at cutting red tape and drawing more foreign investment as he pushes an infrastructure-focused policy.
However, the legislation has sparked mass protests in cities across the nation, as critics say that it would be catastrophic for labor and environmental protections.
HORMUZ ISSUE: The US president said he expected crude prices to drop at the end of the war, which he called a ‘minor excursion’ that could continue ‘for a little while’ The United Arab Emirates (UAE) and Kuwait started reducing oil production, as the near-closure of the crucial Strait of Hormuz ripples through energy markets and affects global supply. Abu Dhabi National Oil Co (ADNOC) is “managing offshore production levels to address storage requirements,” the company said in a statement, without giving details. Kuwait Petroleum Corp said it was lowering production at its oil fields and refineries after “Iranian threats against safe passage of ships through the Strait of Hormuz.” The war in the Middle East has all but closed Hormuz, the narrow waterway linking the Persian Gulf to the open seas,
Nanya Technology Corp (南亞科技) yesterday said the DRAM supply crunch could extend through 2028, as the artificial intelligence (AI) boom has led the world’s major memory makers to dramatically reduce production of standard DRAM and allocate a significant portion of their capacity for high-bandwidth memory (HBM) chips. The most severe supply constraints would stretch to the first half of next year due to “very limited” increases in new DRAM capacity worldwide, Nanya Technology president Lee Pei-ing (李培瑛) told a news briefing. The company plans to increase monthly 12-inch wafer capacity to 20,000 in the first half of 2028 after a
Taiwan has enough crude oil reserves for more than 100 days and sufficient natural gas reserves for more than 11 days, both above the regulatory safety requirement, Minister of Economic Affairs Kung Ming-hsin (龔明鑫) said yesterday, adding that the government would prioritize domestic price stability as conflicts in the Middle East continue. Overall, energy supply for this month is secure, and the government is continuing efforts to ensure sufficient supply for next month, Kung told reporters after meeting with representatives from business groups at the ministry in Taipei. The ministry has been holding daily cross-ministry meetings at the Executive Yuan to ensure
RATIONING: The proposal would give the Trump administration ample leverage to negotiate investments in the US as it decides how many chips to give each country US officials are debating a new regulatory framework for exporting artificial intelligence (AI) chips and are considering requiring foreign nations to invest in US AI data centers or security guarantees as a condition for granting exports of 200,000 chips or more, according to a document seen by Reuters. The rules are not yet final and could change. They would be the first attempt to regulate the flow of AI chips to US allies and partners since US President Donald Trump’s administration said it rescinded its predecessor’s so-called AI diffusion rules. Those rules sought to keep a significant amount of AI
RSS