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Indonesia will finish 2020 experiencing its first recession in two decades, but signs of recovery are increasing, driven by a pick-up in consumption and a significant increase in public spending, according to the World Banks latest Indonesia Economic Prospects report, Towards a Secure and Fast Recovery.
The economy is expected to contract by 2.2 percent this year, revised downward from a projected contraction of 1.6 percent in September, due to persistent mobility restrictions and social distancing amid rising COVID-19 cases. However, growth is expected to rebound in 2021, with the economy expanding by 4.4 percent if mobility restrictions are gradually eased and the wide availability of an effective and safe vaccine helps improve consumer and business confidence.
The report notes that such projections are still highly uncertain, given the dynamics of the pandemic in Indonesia and abroad, and stresses that the...