BI Board of Governor's Meeting, May 2020

Riatu Mariatul Qibthiyyah (), Syahda Sabrina (), Nauli A. Desdiani (), Teuku Riefky, Amalia Cesarina and Meila Husna ()
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Riatu Mariatul Qibthiyyah: Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)
Syahda Sabrina: Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)
Nauli A. Desdiani: Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)
Meila Husna: Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)

No 202005, LPEM FEBUI BI Board of Governor Meeting Brief from LPEM, Faculty of Economics and Business, University of Indonesia

Abstract: The Covid-19 pandemic has already hit Indonesia economy in the first quarter of 2020, perceived as the early-stage impact. GDP growth decelerated to 2.97% (yoy), became the slowest pace of growth since the Asian financial crisis. Household consumption and investment grew sluggishly as a consequence of the implementation of social distancing to curb the spread of Covid-19 which dampens demand and economic activities. These declines were offset partially by an increase in net export. Looking at the trade balance surplus trend over two consecutive periods, we predict that CAD will improve to around 1.4-1.6% in Q1-2020. As the pandemic peak is yet to come, the gloomy outlook for Indonesia economy prevails. Weakening demand, disruption of the global supply chain, and lower global commodity prices are expected to put further pressure on the economy in Q2 and Q3 2020. Meanwhile, we still see stable inflation as subdued demand countering the risk of a supply shock.

Keywords: gdp; —; economic; —; economic; outlook; —; inflation; —; macroeconomics; —; interest; rate (search for similar items in EconPapers)
Date: 2020-05, Revised 2020-05
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