There are reasons to be optimistic about Indonesia’s economic activity in the fourth quarter of 2021. Obviously, the underlying reason being that new confirmed COVID-19 infections have not been far from zero in Indonesia throughout the final quarter of the year. As a consequence, the government of Indonesia did not need to impose tough restrictions, hence economic activity is allowed to blossom.
For instance, retail sales in Indonesia show a solid rebound in October 2021 (these data always lag behind a bit, so the most recent data cover October 2021), with a 6.5 percent year-on-year (y/y) growth pace. This is a marked improvement from the 2.2 percent (y/y) contraction one month earlier and is a promising beginning of the fourth quarter that should continue into November 2021. The question is though, to what extent Indonesia’s December 2021 retail sales are going to be dragged down by alarming news reports in international media related to the Omicron mutation, especially after it became known last month that Omicron had arrived in Indonesia.
On the other hand, while Indonesia’s central government initially planned to impose tighter restrictions during the Christmas and New Year period in an attempt to curb the possible spread of COVID-19 amid these celebrations, these plans were canceled as the COVID-19 threat is currently too low in Indonesia.
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