Indonesia virus-hit economy posts first yearly contraction since 1998

JAKARTA: Indonesia on Friday logged its first annual contraction since the 1998 Asian financial crisis, as the coronavirus pandemic slammed Southeast Asia's biggest economy.

The country's gross domestic product fell 2.07 percent in 2020 from a year earlier, the statistics agency said, with transportation and tourism among the hardest-hit sectors.

Friday's data marked the first time Indonesia's economy contracted on a full-year basis since it was in the depths of the regional currency crisis which helped force the resignation of its long-term dictator Suharto in 1998.

"The Covid-19 pandemic has hit the whole world, including Indonesia," said statistics agency chief Suhariyanto, who like many Indonesians goes by one name.

The country has some of the worst virus infection rates in Asia, and President Joko Widodo has been widely criticised over his government's handling of the pandemic, which appeared to prioritise the economy.

Suhariyanto said that some indicators, including trade data, showed signs of picking up last month, as the nation of nearly 270 million launches a mass vaccination plan.

"The vaccination program and adherence to health protocols are important keys to an economic recovery," he added.

Several million Indonesians have been laid off or furloughed as the central bank repeatedly cut interest rates in a bid to spur growth.

Governments around the world have been struggling to contain the coronavirus, which has forced the shutdown of vast parts of the global economy./