Airlangga: Still Sluggish, Indonesia's Economy In The 4th Quarter Could Be 2 Percent Negative

Coordinating Minister for Economic Affairs, Airlangga Hartarto. (Photo: Doc. Setkab)

JAKARTA - The Coordinating Minister for Economic Affairs Airlangga Hartarto estimates that Indonesia's economy in the fourth quarter of this year will experience growth of between minus 2 to positive 0.6 percent.

Airlangga said that the projection could occur if the momentum for recovery that began in the third quarter, which contracted 3.49 percent from minus 5.32 percent in the second quarter, can be maintained.

"This shows a 5.05 percent quarter-to-quarter growth. If we can maintain this momentum, growth in the fourth quarter is estimated to be minus 2 percent to positive 0.6 percent," he said, in a virtual discussion, Monday, December 14.

The former Minister of Industry said that the realization of economic growth that occurred from the second quarter to the third quarter showed that Indonesia had passed a rock bottom, so the chance for recovery had to be maintained.

Furthermore, he said, Indonesia has an opportunity for economic recovery to grow by 0.6 percent because there has been an increase in domestic demand and consumer confidence as reflected in increased household consumption.

"Economic improvement in developed and developing countries related to PMI Manufacturing in various countries has started to be positive and in Indonesia it has also reached 50.6," he said.

Not only that, the inflation rate which was maintained at the level of 1.59 percent on an annual basis (year on year / yoy) in November was also the driving force for better growth in the fourth quarter.

Airlangga said, several sectors also provided positive growth, such as agriculture, plantations, education, information and telecommunications, health, and social activities.

"In addition, the manufacturing, trade and consumption industries which have a large contribution to GDP also experience positively," he said.

Meanwhile, said Airlangga, despite the decline in the financial market, the JCI indicator returned to the level before the COVID-19, which was at the level of 5,900 and the rupiah exchange rate strengthened again by Rp. 14,100.

Furthermore, he said, capital flow has returned to Indonesia and of course this is a confident that continues to be encouraged. Apart from that, it also shows real sector activity to boost economic growth in 2021.

Furthermore, from an external perspective, it shows that the positive trade balance will continue in 2020, namely in October it was 3.61 billion US dollars, while from January to October it was 17.07 billion US dollars.

"It shows the resilience of our external sector and we encourage optimism with our foreign exchange reserves of 130 billion US dollars, showing that our financial sector has the same resilience," he said.

Airlangga is optimistic that 2021 is an opportunity for the national economy to be able to create a full recovery due to the increasing movement of driving activities.

"The health protocol that we continue to maintain, the government believes that 2021 will be a year of recovery. A year that provides opportunities for the national economy so that our national economy can move," he said.