Still Locked In Recession, Government Is Optimistic Positive Growth Will Occur In 2021's Second Quarter

JAKARTA - Although Indonesia is still trapped in a recession as indicated by the economic growth in the first quarter of 2021, which contracted by minus 0.74 percent on an annual basis, the government, through the Ministry of Finance (Kemenkeu), is optimistic that the rate of improvement will continue.

"We must emphasize that this is our hard work together. The government is yes, the community is clear. This can happen because we can keep the COVID-19 condition low in cases," said the Head of the Fiscal Policy Agency of the Ministry of Finance Febrio Kacaribu in an official statement as quoted on Saturday, May 8.

According to him, the recovery trend is going according to what the government hopes and of course because the community implements health protocols. For example, in terms of the number of people working.

He noted that if the number of job seekers increased by 1.59 million people, while the number of people working increased by 2.61 million people, it would grow faster than the number of people looking for work.

Febrio explained, as the government's effort to encourage job creation, the state budget expenditure for pre-employment cards made by the government matched and even exceeded the target. Of the target of 2 million people, there were 5.5 million people in 514 districts/cities.

In addition, the government continues to optimize the increase in consumption. PPN and PPnBM borne by the government led to an increase in vehicle sales. The Harbolnas program also encourages public consumption and spins the economy. The government is optimistic that this recovery will continue in the following quarters.

"In the second quarter, we are quite optimistic that we will continue this recovery and also the national economic recovery program that we will continue to encourage. We hope that it will produce what we hope for in the second quarter and beyond," said Febrio.

As reported by VOI previously, the Central Statistics Agency (BPS) confirmed that Indonesia's economic growth during the first quarter of 2021 was still on a contractionary path with a record of minus 0.74 percent on a year-on-year (y-o-y) basis compared to the same period in 2020.

Meanwhile, household consumption was the source of the deepest contraction with minus 1.22 percent.

Head of BPS Suhariyanto said the score in the first three months of this year was lower than the fourth quarter of 2020 (quarter-to-quarter/q-t-q) with 0.95 percent.

"However, if we look at the second quarter 2020 period, the trend of improvement has begun to appear. This shows that the signs of economic recovery are getting clearer,” he said in a press conference broadcasted virtually, Wednesday, May 5.

Suhariyanto added that structurally the formation of gross domestic product (GDP) of economic activity in the first trimester of this year did not change with 64.5 percent of them coming from five main sectors, namely industry, agriculture, trade, construction, and mining.

"So, what happens in these five sectors will greatly affect our economic growth," he said.

Moreover, continued Suhariyanto, the number of workers in these five fields is very large. Especially for the agricultural sector, the Head of BPS said that this sector has always grown at a positive level during the 2020 period to the present.

"And again in the first quarter of 2021, agriculture could grow by 2.95 percent. Of course, this is very encouraging, considering that around 30 percent of Indonesian workers work in this field, ”he explained.

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Tag: ekonomi bps resesi indonesia kementerian keuangan