Meanwhile, the full-year 2020 GDP growth figure of Indonesia was also less severe compared to our forecast. While Indonesia Investment had set its FY-2020 outlook at the range of 2.5 to 3.0 percent (y/y), in reality the contraction was only 2.07 percent (y/y).

For Indonesia, 2020 was the first full-year of negative growth since 1998 when the Asian Financial Crisis (which snowballed into a massive political and social crisis for Indonesia) swept the country’s foundations. Like 1998, the ongoing COVID-19 crisis also undoes a lot of good work done on poverty alleviation, while millions of people lost their jobs due to the unprecedented drop in consumption, production, trade, and investment.

So, in various respects, the country is thrown back a couple of years. The exact extent of the damage (for example the rise in poverty) is yet to become clear. Perhaps it will take until 2023 before most becomes clear as the crisis is still ongoing today. Meanwhile, other forms of damage should also not be ignored. For example, a possible developmental delay for children as they cannot enjoy education as usual, while social restrictions could have an impact on children’s secondary socialization (probably it are the urban children who are more affected as they tend to meet other children at school, while children in sub-urban or rural environments can still play – and socialize – with other children in their streets or neighborhoods).

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This update consists of 12 pages.

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