Indonesia’s Economy in the Second Quarter of 2021 Grows by 7.07 Percent!

Indonesia's Economy

The Central Statistics Agency (BPS) reported that Indonesia’s economic growth in the second quarter of 2021 was 7.07 percent on an annual basis (year on year / yoy). This achievement became a turning point after the previous quarter still recorded a contraction of -0.74 percent.

With this achievement, the Indonesian economy was finally able to return to the positive, after contracting four times in a row since the second quarter of 2020. At that time, in the second quarter of 2021, the Indonesian economy was -5.32 percent.

“Thus, the calculation of growth in the second quarter of 2021 on an annual basis, the Indonesian economy will grow 7.07 percent,” said Head of BPS Margo Yuwono at a press conference, Thursday (August 5, 2021).

When viewed quarterly, economic growth in the first quarter grew 3.31 percent (qtoq). Cumulatively in January-June 2021 compared to January-June 2020, the Indonesian economy grew 3.10 percent (CtoC). Margo said that the Indonesian economy was based on GDP in the first quarter of 2021 at the current price of IDR 4,175.8 trillion.

Meanwhile, based on a constant base price with the base year 2010 is Rp 2,772.8 trillion. According to expenditure on an annual basis (year on year/yoy), the components of exports, imports, investment, and household consumption have increased in the second quarter of 2021.

The increase in income can be seen from the extraordinary growth of car sales of 758.68 percent in the second quarter, compared to the 10 percent growth. “The increase in income is also reflected in the increase in PPh 21 by 5 percent, PPnBM 8 percent in the second quarter of 2021 compared to the second quarter of 2020,” concluded Margo.

Previously, positive economic growth in the second quarter of 2021 had been predicted by the government. The achievement is even in line with the projected target of around 7 percent. This high projection takes into account the base effect factor from the deep contraction in the second quarter of the previous year and the recovery in economic activity.

Minister of Finance, Sri Mulyani Indrawati, hopes that positive economic growth will still occur in the third and fourth quarters even though the Delta variant begins to peak in mid-June 2021.

Overall, the government projects economic growth in the range of 3.7 percent to 4.5 percent throughout 2021. Covid-19 can be maintained at a moderate level and community activities are restored, so Indonesia can grow 4.5 percent this year.

“But if this (increase in cases) is a bit long, then it can go down to 3.75 percent,” she concluded.