Indonesia: BI sees growth bottoming in 2Q20

  • Bank Indonesia (BI) has pledged to go all out to bolster the economy as the central bank has forecast economic growth to weaken 0.4% in 2Q20 due to coronavirus containment measures.
  • BI Governor Perry Warjiyo projected gross domestic product (GDP) growth to pick up slightly to 1.2% in 3Q20 and 3.1% in 4Q20, adding that the central bank might revise down its initial growth projection of 2.3% for 2020 after the lower-than-expected 1Q20 growth print.
  • BI’s forecast was based on the assumption that the virus outbreak would peak in May 20 until mid-Jun 20, with economic activities starting to stabilize in 3Q20.
  • BI has injected a total IDR503.8tr in additional liquidity to banks and the financial system to help cushion the economic impacts of the virus outbreak and to strengthen the rupiah as part of its quantitative easing measures.

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