The Old Song Resonates Again, Household Consumption Becomes The 'Savior' Of Indonesia's Economic Growth To Touch 7.07 Percent

Illustration (Photo: Doc. Ministry of Finance)

JAKARTA - The Central Statistics Agency (BPS) informed that the economic growth in the second quarter of 2021, which was 7.07 percent year-on-year (yoy), was still dominated by household consumption. This was confirmed by the Head of BPS Margo Yuwono in a press conference that was held virtually today.

“The source of Indonesia's economic growth is still dominated by household consumption, which is 3.17 percent. Then followed by PMTB (Gross Fixed Capital Formation) at 2.30 percent, net exports 0.98 percent, government consumption at 0.61 percent, and others at 0.01 percent," he said, Thursday, August 5.

In Margo's explanation, specifically, household consumption in the second trimester of this year rose to 5.93 percent compared to the first trimester which was still minus 2.22 percent.

"The strengthening occurred in the sales group, namely food, beverages, tobacco, clothing, spare parts and accessories, vehicle fuel, and other goods," he said.

Margo added that the consumption of motorized vehicles also experienced a significant increase driven by tax incentives provided by the government.

"Wholesale sales of passenger cars and motorcycles grew by 904.32 percent and 268.64 percent year-on-year, respectively," he said.

On this occasion, the BPS boss, who has only been in office for about two months, also revealed that in general Indonesia's economic growth rate during the second quarter of 2021 was recorded at 7.07 percent yoy.

Meanwhile, year-to-date (January-June 2021) economic growth is stated at 3.10 percent.

Need new sources of growth

Separately, the Chairman of the Board of Commissioners of the Financial Services Authority (OJK) Wimboh Santoso said that Indonesia needed to open up new sources of economic growth that were more sustainable (sustainable) apart from the consumption sector.

According to Wimboh, this strategy is considered to be a solution to potential problems that often arise as a result of tightening community mobility.

“So this new source of growth can still absorb labor. We assess that the export-oriented business sector can be chosen so that the economy can grow more stable and sustainably," he said.