The COVID-19 (coronavirus) pandemic has led to the largest global recession since World War II. Like in most countries, private consumption in Indonesia slowed as mobility restrictions and preventive behaviors curbed household consumption. Investment growth declined with heightened uncertainty and lower commodity prices. There was a broad-based slowdown across sectors. Manufacturing, construction, and low value-added service sectors, including transport, storage, hotels, and restaurants, which employ a large number of economically vulnerable informal workers, all saw by mid-2020 a near halving in their sectoral growth rates from the fourth quarter of 2019.
The potential impacts of the COVID-19 pandemic and the containment measures are expected to be severe on Indonesian households’ welfare, impacting households through three broad channels: (i) the income/employment channel, which includes both labor and non-labor income, (ii) the price channel that may affect the affordability of essential commodities, and (iii) the long-term human capital channel. The government of Indonesia has already adopted several mitigating measures, but more data and information over time is needed to determine the adequacy of these efforts.
As the economic fallout and policy response continue to co-evolve over coming months, there is a strong demand for information on:
- The transmission mechanisms of the health and socio-economic impact on the population;
- The impact on medium, small and micro enterprises that are sources of livelihood for most informal workers;
- The reach and efficacy of the public policy responses put in place by the Government as the population copes; and
- Evolving sentiments and perceptions of the population as the crisis unfolds.
Set up in March 2020 with support of the Australian Government through the Partnership for Knowledge-Based Poverty Reduction Trust Fund, the World Bank Indonesia COVID-19 Observatory is a constellation of quick-deploying data collection efforts that respond to this demand. It aims to generate near-real-time insights on the impact of the COVID-19 crisis and inform the policymaking process by identifying gaps that may require scaling up or redirecting of policy responses to under-covered areas as the crisis unfolds.
The Observatory monitors:
- Social media platforms while conducting rapid polls to solicit information on citizen knowledge, concerns, and sentiments, including policy responses.
- Socioeconomic impacts of COVID-19 on households through a national phone-based high-frequency (HiFy) survey that tracks impacts of COVID-19 on over 4,000 households during the emergency response and economic recovery phases of the pandemic.
- Impacts on firms through surveys with a focus on merchants that sell on large online platforms.