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Indonesia economy shrinks for fourth straight quarter

Indonesia economy shrinks for fourth straight quarter

A man wears a face mask to help curb the spread of the coronavirus at a market in Jakarta Monday, May 3, 2021. (AP Photo/Achmad Ibrahim)

JAKARTA: Indonesia's economy shrank for the fourth consecutive quarter in January-March, data showed Wednesday (May 5), as the country's leaders struggle to overcome a recession wrought by the coronavirus pandemic.

The 0.74 per cent on-year contraction was a big improvement on the 2.19 per cent in the previous three months but slightly worse than expected, with the tourism sector among the worst-affected industries.

However, statistics bureau Suhariyanto told reporters: "It is still negative, but it is much better compared to the previous quarters which shows that the trend of the economic recovery is on track."

On a quarterly basis, Southeast Asia's biggest economy contracted 0.96 per cent.

Last year the economy shrunk 2.07 per cent as it entered its first recession since 1999 during the Asian financial crisis.

READ: Thousands make last-ditch attempt to leave Jakarta ahead of 2nd Idul Fitri travel ban

Millions of Indonesians have been laid off or furloughed as the country struggled under the weight of the pandemic and in April the central bank revised down its growth outlook for this year to 4.1-5.1 per cent, from a previous estimate of 4.8-5.3 per cent.

COVID-19 infections have topped 1.6 million with more than 46,000 deaths, putting Indonesia among the worst-hit Asian countries.

The government has unveiled more than US$48 billion in stimulus to help offset the impact of the virus, which forced the government to impose wide-ranging, economically-painful containment restrictions.

And while it has kicked off its vaccination drive, just over 20 million of the country's 270 million people have so far received their first jab.

READ: Indonesia finds cases of Indian COVID-19 variant as officials warn on Eid travel

Analysts warned government restrictions and the slow vaccine rollout will hamper economic recovery efforts.

"Indonesia's economy struggled to gain any momentum in the first quarter of the year and a failure to contain the virus will hold back the recovery in the quarters ahead," Gareth Leather, Senior Asia Economist from Capital Economics said.

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