Get Ready, Economic Growth Is Almost Sure To Drop Free To The Minus Level This Quarter

The atmosphere of the city of Jakarta (Angga Nugraha / VOI)

JAKARTA - Executive Director of the Institute for Development of Economics and Finance (Indef) Enny Sri Hartati has a strong belief that economic growth in the first quarter of 2021 is in the red zone, aka negative.

"It is almost certain that it will be negative, because we (the government) calculate based on the aggregator for the same period the previous year," he told VOI Friday, February 5.

For information, the growth rate in the first quarter of 2020 is still at a positive level with a record of 2.97 percent. This year's pandemic factor is believed to make room for growth not to exceed the achievement in the first quarter of 2020.

"Unless there is a miracle, maybe it can (exceed), but I see that it will still be depressed," he said.

Furthermore, the economist considered that the drop in imports of capital goods and consumer goods this year is a momentum to optimize the potential of the domestic market to produce products to support economic activity.

"All countries are now installing protection, so it is difficult for us to find capital goods. This step can also be seen that they prioritize domestic markets rather than fulfilling exports. For this reason, this is our momentum to create a barrier against the onslaught of foreign products, "he said.

For information, the Central Statistics Agency (BPS) reported that Indonesia's economic growth throughout 2020 contracted minus 2.07 percent on an annual basis compared to the 2019 period.

BPS revealed that the 2020 gross domestic product (GDP) at current prices was IDR 15,434.2 trillion or IDR 56.9 million per capita.

One of the reasons for the depressed growth is the contraction in household consumption which is at minus 2.63 percent.

This indicates that people's purchasing power is not at all good. In fact, household consumption and investment contributed 89.4 percent of last year's GDP formation.