Economy Grows 7.07 Percent, Trade Minister Lutfi: Supported By Higher Consumption Than Before The Pandemic

Minister of Trade, M. Lutfi. (Photo: Doc. Ministry of Trade)

JAKARTA - Indonesia has managed to get out of the economic recession caused by the COVID-19 pandemic. This success is shown by the second quarter economic growth of 7.07 percent year on year (yoy). This increase in growth was also supported by improvements in trade and consumption.

Minister of Trade Muhammad Lutfi said he was happy with the positive return of the Indonesian economy after previously experiencing a long contraction. This also shows the improving performance of the trade sector.

"The BPS announcement said that the second quarter of 2021 growth was encouraging 7.07 percent yoy. Economic growth was supported by very encouraging sectoral growth, especially under the Ministry of Trade, which we can count a lot," he said at the 'Economic Dialogue on Economic Performance for the Second Quarter 2021', virtually, Thursday, August 5th.

Furthermore, Lutfi said the improving economic performance in the second quarter of this year is also in line with the trend of Indonesia's trading partners, which grew by an average of 7.9 percent. Among them, America experienced 12.2 percent growth, Singapore grew 14 percent and the European Union grew 13.7 percent.

As for economic growth, said Lutfi, from the trade sector, consumption grew 5.93 percent. Furthermore, exports grew by 31.78 percent and imports by 22 percent, of which 90 percent of imports were industrial raw materials.

"Consumption growth is already at the level of 5.93 percent, the data shows this is a level that has returned, even better than before the pandemic," he said.

Then, the transportation and warehousing sector grew by 25.1 percent. Meanwhile, food and beverage accommodation recorded an increase of 21.58 percent. Then, the retail trade sector grew by 9.44 percent and the manufacturing industry also grew by 6.58 percent.

According to Lutfi, the composition of gross domestic product or GDP this quarter was also supported by an increase in household spending by 57.23 percent. Then non-household consumption grew by 1.32 percent, and government consumption by 8.7 percent.

"This means that Indonesia's economic growth by consumption is 58.55 percent of the Indonesian economy," he said.

Then, continued Lutfi, fuel consumption also increased by 46.6 percent. Meanwhile, spare parts and other accessories grew 24 percent.

"Likewise, if we look at import growth, it has been much better compared to the period before the pandemic," he said.