Coordinating Minister Airlangga: Indonesia's Economic Growth Is 7.07 Percent Better Than South Korea And Vietnam

Coordinating Minister for the Economy, Airlangga Hartarto. (Photo: Doc. Coordinating Ministry for the Economy)

JAKARTA - Coordinating Minister for the Economy Airlangga Hartarto said the Indonesian economy has shown improvement amid the COVID-19 pandemic with the achievement of economic growth of 7.07 percent on an annual basis (YoY) in the second quarter of 2021, which exceeded the growth of several countries, such as Vietnam and South Korea.

"Indonesia's economic growth grew 7.07 percent on an annual basis (YoY), the highest since the era of the subprime mortgage crisis (the cause of the global financial crisis in 2008). said Coordinating Minister Airlangga Hartarto at the HSBC Summit, quoted from Antara, Wednesday, August 25.

Coordinating Minister Airlangga compared Indonesia's economic growth with South Korea which grew 5.9 percent and Vietnam which grew 6.6 percent in the second quarter of 2021. He said the Indonesian government's efforts to reduce the rate of COVID-19 transmission were the main keys to accelerating economic recovery in the second quarter of 2021.

"Indonesia's economic growth is driven by growth in household consumption, which in the second quarter of 2021 reached 5.9 percent (YoY)", he said.

In addition, Coordinating Minister Airlangga said that domestic demand also continued to increase as industrial activities gradually recovered with an increase in production capacity. This investment in the second quarter of 2021 grew 7.54 percent (YoY).

From external factors, according to him, the improvement in global demand has also become a stimulus to accelerate the recovery of the domestic economy. Indonesia's exports grew significantly which led to a continued trade balance surplus over the last 15 months. Global demand has become an additional stimulus to encourage exports to grow by 31.78 percent (YoY) and imports by 31.22 percent (YoY) in the second quarter of 2021.

Meanwhile, other indicators for external resilience, namely foreign exchange reserves were also maintained with the achievement of 137 billion US dollars.

In the future, said Coordinating Minister Airlangga, the government will continue to prioritize COVID-19 control policies as a prerequisite for economic recovery. Therefore, the government has also increased the budget for handling COVID-19 and Pemulihan Ekonomi Nasional (PEN) Party to IDR 744.7 trillion in 2021. The Ministry of Finance has also prioritized the health and social protection budget in 2021 and 2022.

In 2022, the government is committed to achieving economic growth of 5-5.5 percent (YoY).

Some of the government's future strategies, among others, according to Coordinating Minister Airlangga, is to implement the Job Creation Act, one of which is to launch a risk-based licensing system (OSS).

In addition, the government has also established an Investment Management Agency (LPI) to increase and optimize investments that are managed in the long term so that they can support development financing.