Finance Minister Forecast Indonesia’s Economic Growth at 8.3 Percent in Q2 due to Seasonal Factors

JAKARTA, KOMPAS.com – Indonesia’s economic growth is expected to reach 8.3 percent in the second quarter of 2021, Finance Minister Sri Mulyani Indrawati said on Monday, May 24.

The projection surpassed the previous estimate between 6.9 percent and 7.8 percent and would rise significantly from the recent growth rate which contracted 0.74 in the first quarter of 2021.

“We estimate [the economic growth] in the second quarter will stand between 7.1 percent and 8.3 percent,” said Sri Mulyani during an online working meeting with House of Representatives Commission XI overseeing financial affairs at the parliament building in Jakarta.

She also projected that the household consumption in the second quarter will grow between six percent and 6.8 percent caused by a seasonal factor of an increase in mobility of the people in April and May during the fasting month of Ramadan and Eid al-Fitr celebrations.

Also read: Indonesia’s Economy Shrinks 0.74 Percent in Q1

Meanwhile, the government consumption will stand from 8.1 percent to 9.7 percent and the investment is expected to reach between 9.4 percent and 11.1 percent.

“Indonesia’s export value hit more than 50 percent in April as we estimated the realization of the exports from all quarters would reach between 14.9 to 19.7 percent, while the import would grow from 13 to 19.7 percent,” the minister said.

Sri Mulyani explained that apart from the seasonal factor during the previous fasting month and Eid al-Fitr celebrations, the people consumption also rose. The consumer index recorded above 100 or higher than its previous position in April 2020.

Retail sales rose about 9.8 percent in April, which came from the food and beverage sector after it grew 266.7 percent. However, household appliances, clothing, and recreation sector were still recovering.

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