BOTTOM LINE: In a nutshell, the Indonesian economic situation has yet to demonstrate signs of recovery up to mid-August. The deflation in July signifies weak demand and purchasing power. Low inflation does not help to strengthen rupiah, which was volatile over July and on a depreciating trend in two weeks of August. While manufacturing improved and approaching expansionary phase, the decrease in import confirms low demand of intermediary goods for production process. The government debt continued elevating and so did budget deficit, but expenditure on programs to handle pandemic and support economic recovery remained underperformed. GDP suffered negative growth of 5.32% (y-oy) in Q2/2020 and the risk of recession is looming should the GDP chart another contraction in the third quarter.