JAKARTA- Indonesia is expected to report this week an economic growth of more than 6 percent in the second quarter, but a new wave of COVID-19 cases, which started to hit in June, is clouding the outlook for subsequent quarters, a Reuters poll showed on Tuesday.
The median forecast of 22 analysts in the poll was for gross domestic product (GDP) growth of 6.57 percent in April-June on an annual basis, the first expansion in five quarters.
That is also the fastest clip since 2010, albeit less optimistic than the government’s projection of 7 percent and the central bank’s estimate of 6.75 percent.
Southeast Asia’s biggest economy shrank 2.1 percent last year, the first contraction since 1998, as the pandemic hit consumption and investment. It was still weakening in the January-March quarter, contracting 0.74 percent year-on-year.
Analysts said the rebound forecast for the second-quarter was based on a range of positive data, including rising car, motorcycle, and cement sales, record highs in a purchasing managers’ index, as well as surging exports.
However, some said the forecasted high growth rate was mostly a result of the base effect as economic activity plummeted when the pandemic first struck Indonesia in the second quarter last year.
Bank of America analyst Mohamed FaizNagutha described his 7 percent growth forecast as “underwhelming” and noted that on a quarterly, seasonally adjusted basis, “GDP is likely to remain flat to slightly up” compared with January-March. – Reuters