Indonesia’s Economy Shrinks 0.74 Percent in Q1

JAKARTA, KOMPAS.com – Indonesia’s economic growth has contracted 0.74 percent in the first quarter of 2021, experiencing negative growth for four consecutive quarters, the country’s central statistics agency (BPS) revealed on Wednesday, May 5.

Head of BPS Suhariyanto said the economic contraction in the first quarter of this year was less severe than before when Indonesia saw its gross domestic product (GDP) contract 2.9 percent in the previous quarters.

“This shows signs of economic recovery will become even more apparent. We hope that economic recovery in 2021 can come true,” Suhariyanto said in a virtual news conference.
Suhariyanto said that the Indonesian economy in the first quarter was valued at 3,969 trillion rupiahs ($274.8 billion) based on current prices, while the gross domestic product (GDP) at constant prices of 2010 was at 2,683 trillion rupiahs ($185.8 billion).

Also read: Indonesian Economy Sinks to A Record Low of Minus 2.07% 

Based on the expenditure on an annual basis (year on year), all components have contracted, including household consumption - the economy’s main growth engine - showed the deepest decline.

Reuters news agency reported that on a quarterly, non-seasonally adjusted basis, the economy contracted 0.96 percent, compared with a drop of 0.42 percent in October-December and forecasts of a 1.04 percent decline.

Consumption, which makes up about half of the country’s GDP, continued to contract from a year earlier as consumers remained reluctant to shell out on big ticket items such as cars.
Meanwhile, government spending grew 2.96 percent growth in the period, Suhariyanto said, as it beefed up social spending.

Indonesia’s economy suffered its first full-year GDP contraction in over two decades in 2020 as the Covid-19 pandemic and anti-virus restrictions battered businesses and left millions without jobs.

Also read: Indonesia Highlights: Indonesia’s Top Diplomat Urges End to the Nationalization of Covid-19 Vaccines | World Bank: The Indonesian Economy Will Take Years to Get Back to Pre-Covid-19 Levels | Man in E

The government pumped 579.78 trillion rupiahs ($40.18 billion) into the economy to help mitigate the impact of the coronavirus last year and had expanded recovery spending this year to 699.4 trillion rupiahs ($48.4 billion) from 403.9 trillion rupiahs ($27.9 billion) budgeted at the start of the year.

Indonesia has recorded the highest number of coronavirus infections and deaths in Southeast Asia. Cases have been declining since peaking in January, but the country reported this week it has detected its first cases of a highly infectious Covid-19 variant first detected in India.

(Writer: Fika Nurul Ulya | Editor: Yoga Sukmana)

Source: https://money.kompas.com/read/2021/05/05/113857126/ri-masih-resesi-pertumbuhan-ekonomi-minus-074-persen-pada-kuartal-i-2021?page=2.