JAKARTA (Reuters) - Indonesia’s household consumption may contract in the second and third quarters due to restrictions on people’s movement to control the spread of the new coronavirus, dealing a heavier blow to economic growth, its finance minister said on Wednesday.
First-quarter gross domestic product (GDP) data showed a sharp slowdown in consumption growth after social distancing curbs were imposed in parts of the country in mid-March, with overall growth falling to a 19-year low of 2.97%.
Indonesia’s GDP is 57% consumption, equal to more than 9,000 trillion rupiah ($596.22 billion), Sri Mulyani Indrawati told parliament.
“When Jakarta and Java (island) implemented large scale restrictions, it’s inevitable that consumption does not grow, it may even contract,” she said, adding that the government’s 110 trillion rupiah welfare programme would not be able to make up for the losses.
Reporting by Gayatri Suroyo; Editing by Kim Coghill