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Indonesia’s Q1 2020 GDP growth was the slowest since 2001. As weak as the GDP print may be, further weakness is likely in Q2 2020 when the full impact of the activity lockdown will be captured, according to ANZ Bank.

Key quotes

“At 2.97% y/y, GDP growth was the slowest since Q4 2001. This is also the first time in 24 quarters that growth has slumped below the 5.5-4.5% range. On a quarterly basis, growth fell by 2.41%, the second consecutive contraction.” 

“Today’s print, despite being the weakest in years, shows growth has still held up relatively favourably compared to regional peers. However, we expect sharper weakness in Q2 which will reflect the full impact of the lockdown on economic activity.”

“Bank Indonesia has cut its policy rate by 50bps since January and we expect at least one more 25bp rate cut at the next policy review on 19 May.”