Indonesia: GDP to decline further before rebounding – Standard Chartered

Economists at Standard Chartered Bank see 0.4% growth in 2020 but raise the Indonesian 2021 GDP growth forecast to 6.0% (from 5%). USD/IDR is trading at 14,888.

Key quotes

“We expect Q2 GDP to contract by 4.3% y/y as more provinces/sub-provinces have implemented large-scale social restriction measures, exacerbated by high base effects from last year’s seasonal and election spending.”

“We raise our 2021 GDP growth forecast to 6.0% y/y from 5.0% previously to account for the lower base effect.”

“We now expect Bank Indonesia (BI) to cut rates by 25bps in this month, earlier than our previous expectation of June, owing to weaker-than-expected growth in Q1 and a relatively stable rupiah (IDR).”