Natural Commodities Bring Papua-Maluku Grow High, Bali And Nusa Tenggara Still Stuck Because Of Tourism?

Illustration. (Photo: Doc. Antara)

JAKARTA - Head of Industry and Regional Research PT Bank Mandiri Tbk. Dendi Ramdani revealed that 10 provinces in Indonesia had experienced positive economic growth at the end of the first quarter of 2021.

In his notes, the Papua region became the area with the highest growth rate, which was 14.3 percent. Followed by North Maluku 13.5 percent, Central Sulawesi 6.3 percent, Yogyakarta 6.1 percent, North Sulawesi 1.9 percent, West Papua 1.5 percent and other regions.

Based on the island, Papua-Maluku is the island with the highest economic growth at 8.97 percent, followed by Sulawesi Island at 1.2 percent.

On the other hand, Bali and Nusa Tenggara are still the islands with the largest economic contraction, which is minus 5.16 percent. To note, Bali and Nusa Tenggara are two areas with a high level of economic dependence on the tourism sector.

"In general, the engine of growth in areas experiencing positive economic growth is mining commodities," he said in his latest release as quoted on Thursday, May 3.

Dendi added that most other economies are still supported by the information and communication sector, health services, and agriculture. Then, based on the expenditure side, economic growth is largely supported by government spending.

He did not deny that depressed household spending had its own impact on the formation of economic growth figures.

"Household spending is the key to future economic recovery because the proportion of household spending in the national economy is the largest, reaching 56.9 percent," he said.

Going forward, the state bank economist projects that the growth rate in the second quarter of 2021 will be in the positive zone following the low-based effect in the second quarter of 2020 that contracted deeply due to the COVID-19 pandemic.

The appreciation of natural commodity prices is expected to continue until the end of 2022, although there may be a slight correction due to price overshooting.

"We estimate that household consumption will also improve because, apart from being driven by rising commodity prices, it is also due to increased consumer confidence, which will encourage people to spend more money, especially for middle-upper income people," he concluded.