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Indonesian economy grows for first time in five quarters

05 August 2021, MVT 14:08
A vegetable seller arranges his produce at a market in Lhokseumawe, Aceh on August 5, 2021, as Indonesia's economy bounced back by in the second quarter of the year, the first positive growth in five quarters since the pandemic hit the archipelagic nation and the largest expansion since 2010 -- Photo: Azwar Ipank/ AFP
05 August 2021, MVT 14:08

But analysts believe Indonesia will struggle to record continued growth as a virus surge triggered by the Delta variant wracks the country.

"Indonesia's economy is struggling badly, with Q2 GDP data showing that the recovery lost some momentum even before the latest surge in virus cases," Gareth Leather, a senior Asia economist for Capital Economics, said in a statement.

The archipelago has reported more than 3.5 million infections and over 100,000 deaths from Covid-19 though official figures are widely believed to be an underestimate.

It has never implemented a full lockdown but introduced restrictions in early July limiting travel and non-essential business activity.

Last year the country's economy shrunk 2.07 percent as it entered its first recession since the 1997 Asian financial crisis.

The central bank recently cut its 2021 GDP growth forecast to between 3.5 percent and 4.3 percent.