Indonesian economy shrinks for first time in two decades

JAKARTA: Indonesia's coronavirus-hit economy contracted in the second quarter for the first time in more than two decades, with warnings that its recovery could be among the weakest in Southeast Asia.

Output in the region's biggest economy slumped 5.3 percent on-year in April-June, the statistics agency said Wednesday, as retail sales and manufacturing took a hit.

That marked Indonesia's first contraction since the first quarter of 1999 during the Asian financial crisis, putting it on course for its first recession since then.

"Economic activity in Indonesia collapsed in the second quarter," research house Capital Economics said in a note after the figures were published.

"A failure to contain the virus effectively and inadequate policy support means the recovery is likely to be one of the slowest in the region."

Governments around the world have been struggling to contain the deadly disease, which forced the shutdown of vast parts of the global economy in the second quarter.

Last month, Indonesia's central bank cut interest rates for the fourth time this year in a bid to boost the struggling economy.