The National Economy Has Not Recovered, Observer: Community Mobility Could Be The Driver

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JAKARTA - The national economic recovery has not yet occurred in the first quarter of 2021, because it is considered that it will still experience a contraction. Although several indicators in the economic sector have shown improvement towards recovery. However, consumption is still very much contracted. Research Director of the Center of Reform on Economics (CORE) Indonesia, Piter Abdullah, is one of the improvements that could trigger national economic growth is community mobility. This is because improved mobility will encourage national economic recovery. As is known, people's mobility is currently still limited. Considering that the government has imposed a ban on Lebaran 2021 homecoming from May 6 to 17. "If we see there has been an improvement in community mobility and it has triggered economic growth that has not recovered but there have been several indicators that show improvement towards recovery," he said in a virtual discussion, Friday, May 30th.

Currently, according to Piter, people's mobility is still limited to short distance movements such as to retail, entertainment venues and to parks. Meanwhile, people's mobility for long-distance movements is still below normal. Furthermore, Piter assesses that long-distance mobility movements need to be taken into consideration to encourage national economic recovery in the future. "These long distance movements are still below normal. These are some of the factors that we still need to consider. Looking at our future economy because the movement of people, the movement of people will determine their socio-economic activities, "he explained.

The upper group is still resistant to consumption

Piter said that the domestic economic growth which is influenced by consumption cannot be believed to be fully recovered this year. Because, consumption is still very much contracted where in the first quarter of 2021 it is estimated to be still negative. "This has improved but is still negative. Until 2020, our consumption growth is still very negative, it is still far minus 17 percent," he explained.Piter said despite optimism. and signs of improvement in a number of sectors, public consumption, especially the upper middle class, has not increased until now. "We cannot be sure that our economic growth, which is heavily influenced by consumption, will fully recover, our consumption is still negative until the first quarter. This is also reflected in inflation. Our core inflation is still very low, "he said. According to Piter, Indonesian consumption was driven by the upper middle class, not consumption of primary goods but rather secondary and tertiary goods. "Currently, primary consumption is still growing, but secondary and tertiary goods from the upper middle class are still restrained, while their contribution reaches 80 percent," he said.