Airlangga Optimistic Economic Growth Can Be 7 Percent In The Second Quarter Of 2021, Is China Becoming The Benchmark?

Coordinating Minister for Economic Affairs, Airlangga Hartarto. (Photo: Doc. Of the Coordinating Ministry for the Economy)

JAKARTA - The COVID-19 pandemic has hit the world economy, including Indonesia. Several countries have shown their economic recovery, one of which is China.

Indonesia has also begun to show signs of economic recovery in the first quarter of 2021. Even though it is still contracting, the figure is much smaller than in the fourth quarter of 2020.

Coordinating Minister for the Economy Airlangga Hartarto said that the government had seen signs of economic recovery since the third quarter of 2020. The realization of growth in the first quarter of 2021, namely minus 0.74 percent (yoy), shows that the Indonesian economy is moving towards a positive trend.

"The economic recovery is visible and confirmation that we are on a positive trend and this is the curve is a V curve like in many other countries," he said in a virtual press conference, Wednesday, May 5.

The former Minister of Industry said that Indonesia's economy is heading for a positive trend, which can be seen from constant prices in the first quarter of 2021, which have a Gross Domestic Product (GDP) of IDR 2,703 trillion or close to the position in the first quarter of 2020.

Then, from the demand side, it is also heading for a better direction, such as household consumption which is minus 2.23 percent or an increase compared to the fourth quarter of 2020 and government consumption which reached 2.96 percent.

Therefore, Airlangga is optimistic that the economy as a whole will grow starting from the second quarter of 2021. According to him, the success of structural reforms will be a boosting factor for the economy in the medium term.

"It is estimated that (national economic growth) in the second quarter will be 6.9 to 7.8 percent," he explained.

If you look at GDP based on constant prices, the realization in the second quarter of 2020 was relatively low, which was only IDR 2,589.8 trillion. Meanwhile, the previous quarter was IDR2,703.1 trillion. Meanwhile, constant price GDP for the first quarter of 2021 amounted to IDR2,703 trillion.

"If our constant price GDP (second quarter) is the same as in the first quarter of 2021, then it has jumped 5.62 percent. Therefore, the government is confident that the figure of 6.9 percent or 7 percent can be achieved in the second quarter of 2021," he said.

As for the second quarter of 2021, the government projects all components to grow. Household consumption rose 6.9 to 7.9 percent, LNPRT consumption 5 percent to 5.5 percent, government consumption 7.6 percent to 7.9 percent, investment 6.4 percent to 8.3 percent, exports 10.5 percent to 12 percent, and imports from 9.5 percent to 14 percent.