Absorbing the Cost of Recession
Three major economic crises have hit Indonesia over the last two decades, or 23 years to be exact.
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A sales promotion is installed in the glass of an outlet at Central Park Mall, West Jakarta, Sunday (4/10/2020). During a pandemic, visitors and turnover have decreased. Retailers are also threatened to increase the number of employees laid off and the possibility of closing their business premises.
Three major economic crises have hit Indonesia over the last two decades, or 23 years to be exact. First was the 1997-1998 crisis that originated in a foreign exchange rate slump. The real sector collapsed, the banking system tumbled, the stock market crashed, economic growth dived and inflation was rampant. The economy was gloomy.
Second, after exhausting efforts to restore the economy, it was again shaken in 2008, albeit at a lower intensity. The situation was dim as the US faced cases of subprime mortgage and became the source of the downtrend in the global economy. Oil prices skyrocketed, as did food prices. In 2008, inflation climbed (11 percent), economic growth promptly declined in 2009 and the fiscal deficit swelled.