Economic contraction of 0.74 percent recorded in Q1 2021: BPS

Indonesia’s economy continued to shrink at 0.74 percent year-on-year (yoy) in the first quarter (Q1) of 2021, according to the Statistics Indonesia (BPS).

“Economic growth in the first quarter of 2021 contracted by 0.74 percent,” BPS Head Suhariyanto stated here on Wednesday.

Suhariyanto attributed the improvement in growth to an upward trend since the GDP contracted 5.32 percent in the second quarter of 2020.

“In comparison with the previous quarter, this shows a significant improvement. The contraction of 0.74 percent shows signs of increasingly concrete economic recovery,” he remarked.

Moreover, it was slightly better than the government’s earlier projection in the range of 0.5 percent to 0.3 percent.

Despite the contraction, the country enjoyed signs of economic recovery in the first quarter of 2021, such as an improvement in the Retail Sales Index, Consumer Confidence Index, and manufacturing Purchasing Managers Index.

A rise in car sales, electricity consumption, and cement production also offered a positive impetus to Indonesia’s economic recovery.

The government is optimistic that Indonesia’s economic performance would continue to increase and grow at a high rate of 4.5 percent-5.3 percent by the end of 2021.

However, to achieve this figure, the economy in the second quarter of 2021 must start to grow positively in the range of 6.9 percent-7.8 percent.

The government believes that positive economic growth can be attained through the state budget stimulus programs, acceleration of the vaccination program, and consistent implementation of health protocols.

Furthermore, the government will encourage the strengthening of local industries in various key strategic fields, such as palm oil, chemicals, aluminum, electronics, and footwear to help boost the economy.

The BPS earlier recorded that Indonesia’s economy had contracted by 2.07 percent (yoy) in 2020.

When the COVID-19 pandemic started to impact the economy, Indonesia’s economic growth had slowed down to 2.97 percent in the first quarter of 2020, as compared to some five percent (yoy) in normal conditions.

Source: Antara News

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