Indonesia’s economy was on hold due to the Covid-19 pandemic. Fortunately, the government was slowly able to control the pandemic. As a result, the economy continues to grow. Indonesia’s economy grew 5.44% (year on year/yoy) in the second quarter of 2022. What about the quarter III?
If eliminated 2020-2021 due to the coronavirus pandemic (Coronavirus Disease-2019/Covid-19), the growth in the second quarter of this year is the highest since the fourth quarter of 2013. That is, this growth rate is the highest in 8 years!
The Central Statistics Agency (BPS) today also announced that the Indonesian economy grew 3.72% compared to the previous quarter (quarter to quarter/qtq). For the record, in the first quarter of 2022, the Indonesian economy grew 5.01% (YoY) but contracted 0.95% (qtq).
With growth reaching 5.44% in the first quarter of 2022, Indonesia’s Gross Domestic Product (GDP) has grown above 5% or to its historical level for three consecutive quarters.
The Indonesian economy contracted for four quarters in 2020-2021, namely from the second quarter of 2020 to the first quarter of 2021. The Indonesian economy had indeed shot to the level of 7.07% in the second quarter of 2021.
However, the growth spurt was more due to the low calculation base in the previous year considering the Covid-19 pandemic devastated the Indonesian economy in the second quarter of 2020.
If looked at BPS data and eliminate the 2020-2021 anomalous year, then this is the first time that the Joko Widodo (Jokowi) government has been able to record growth of up to 5.44%. This growth is close to the fourth quarter of 2013 which is 5.58% where Indonesia is still led by President Susilo Bambang Yudhoyono (SBY).
Furthermore, Head of BPS Margo Yuwono explained that Indonesia’s high economic growth was supported by household consumption and exports.
In the second quarter of 2022, household consumption contributed 51.47% to economic growth, while exports accounted for 24.68%.
Festive Eid celebrations, relaxation of mobility, and Cash Direct Assistance (BLT) made consumption soar.
Meanwhile, the surge in energy and food commodity prices made exports accelerate.
In the second quarter of 2022, household consumption grew 5.51%, the highest since the second quarter of 2021 at 5.96%. If we eliminate the anomalous movement in 2020-2021, consumption growth in the second quarter of this year is the highest since the first quarter of 2013 (5.68%).
With growth reaching 5.51% in the second quarter of 2022, household consumption also grew back to its historical level of around 5% before the pandemic.
On the other hand, Bank Danamon Economist Wisnu Wardana estimates that economic growth will remain high in the quarter III this year. Apart from the still strong demand, the high growth in the quarter III of 2022 will be due to the low calculation base last year.
For the record, Indonesia’s economic growth slid to 3.51% (YoY) in the third quarter of 2021 due to the very limited mobility of the people. The government has imposed an Emergency Community Activity Restriction (PPKM) since July 3, 2021, due to the Delta variant of the Covid-19 wave.
Referring to BPS data, inflation in early July reached 0.64% (month to month/mtm) and 4.94% (YoY). Annual inflation in July was the highest since October 2015.
Bank Mandiri economist Faisal Rachman estimates that economic growth in the third quarter of 2022 will increase and even reach 6%.