Indonesia returns to lower-middle-income rank due to COVID-19

COVID-19 vaccination in Indonesia (Source: Xinhua/VNA)

Jakarta (VNA) - Indonesia has lost its upper middle-income status after a year, as coronavirus outbreaks have reversed its gains in curbing poverty and employment.

The World Bank downgraded Indonesia to lower-middle income status on July 1, with a gross national income per capita of 3,870 USD. The country had graduated to upper-middle income status last year with a GNI per capita of 4,050 USD.

Last year, the epidemic has created negative economic growth in almost all countries, including Indonesia, therefore the decline in Indonesia’s per capita income was an unavoidable consequence, Indonesian fiscal policy chief Febrio Kacaribu said in a statement on July 8.

The country’s gross domestic product shrank 2.1 percent last year as its economy endured its first recession since the Asian Financial Crisis more than two decades ago.

The pandemic has brought about shuttered businesses, pay cuts and job losses. That had dragged as many as 2.75 million more Indonesians below the poverty line as of last September.

The country’s efforts to maintain a single-digit poverty rate over the last three years were shattered as the rate rose to 10.19 percent from 9.22 percent a year earlier, government data showed. The number of unemployed increased to 8.75 million as of February, with the pandemic costing 1.6 million people their jobs./.

VNA