Airlangga: Economy Can Grow Positively But Depends On The Handling Of The Delta Variant Of COVID-19 In The Country

DOK ANTARA/Coordinating Minister for Economic Affairs Airlangga Hartarto

JAKARTA - Coordinating Minister for Economic Affairs Airlangga Hartarto is still optimistic that Indonesia's economic growth can still grow positively at around 3.7 percent to 4.4 percent.

However, Airlangga acknowledged that the accuracy of this achievement still depends on controlling the spread of the delta variant of the COVID-19 virus in the country.

"Of course the government is still looking at the handling of the COVID-19 pandemic related to this delta variant, how long it will take because this will greatly determine our scenario assumptions," he said in a virtual press conference, Friday, July 9.

Airlangga said the handling of the delta variant of COVID-19 greatly influenced the government's assumptions. According to him, if it is handled more quickly, the prediction of national economic growth will be more open. On the other hand, if it is slow to treat it will be viewed conservatively.

"If we look at the end of the first quarter of 2021, economic growth was recorded at minus 0.72 percent and in the second quarter with various policies, especially taxation, we see that the recovery is visible and the government sees this 7 percent figure can be achieved in the second quarter," he said.

In addition, said Airlangga, this optimism was also driven by a trade balance surplus of up to 13 consecutive months. In May 2021 this surplus reached US$10.6 billion, supported by commodity prices of coal, steel, palm oil, rubber and aluminum. This includes CPO and its derivatives and export products related to jewelry.

However, said Airlangga, it is very unfortunate that entering the third quarter Indonesia is faced with the spread of the virus which has increased significantly. So that the consumer index which is already at level 104 is feared to decline. In line with the target of reducing human mobility by 50 percent.

Therefore, said Airlangga, the wheel of economic cycle was again charged to government spending. It is expected that consumption demand can still be pushed up to above 5.6 percent.

"We hope that consumption in the third quarter is still driven above 5.6 percent, this is consistently followed in the fourth quarter," he said.

Not only that, the investment sector is also expected to support economic growth until the end of the year. Airlangga said, the momentum for increasing exports must also be maintained in order to remain at 13 percent.

According to Airlangga, the handling of the delta variant virus in Indonesia is not much different from that carried out in India. Therefore, the government also implemented emergency and micro PPKM policies and accelerated the vaccination process to overcome them.