JAKARTA (TheInsiderStories) - Statistics bureau reported the economic growth of Indonesia for the first quarter (1Q) of 2021 still contracted 0.74 percent of gross domestic products (GDP) compared to the same quarter of last year and from the previous quarter of 0.96 percent. With the latest data, the country’ economy has contracted in the four consecutive quarters and still trapped in the economic recession.
In this year, President Joko Widodo optimistic that Indonesian economy will grow 5 percent in this year with various efforts by the government. In the 2021 State Budget, the Southeast largest economy targeting the economy to grow 4.3 to 5.0 percent after contracted 2.19 percent in the previous year.
“Due to the pandemic our economy in uneasy situation. Therefore, we all have to work hard to accelerate our national economic recovery. The target our economic growth must reach 5 percent,” he said on April 3.
He urged, his staff work more detail and analyzed which sectors are disrupted and what to do with their problems. If needs an incentive, he asserted, the government must give it. Then, he also pushed the officials to inviting new investment to the country. According to the former Jakarta governor, investment, exports and job creation are the keys to the economic growth.
While, the International Monetary Fund (IMF) has reported their outlook on Indonesian economy. The real GDP is projected to expand by 4.8 percent in 2021 and 6 percent in 2022, led by strong policy support measures, including increased public investment and COVID-19 vaccine distribution plans, as well as improved global economic and financial conditions.
Then, inflation is projected to rise gradually to 3 percent at end-2021. The current account deficit is projected to widen to 1.5 percent of GDP in 2021, reflecting higher imports driven by economic recovery. And Credit growth is expected to pick up in 2021 with stronger activity, albeit remaining below nominal GDP growth due to increased risks to asset quality and bank profitability.
The uncertainty surrounding the growth outlook is nevertheless larger than usual. Early widespread vaccination is an upside risk, while delays could lead to a more protracted pandemic, a downside risk. The macro-financial fallout of the pandemic and economic downturn could be larger-than-expected, and credit conditions could be slow to improve.
Written by Editorial Staff, Email: theinsiderstories@gmail.com
