Indonesia’s Economy Soars 7.07 Percent in Second Quarter

JAKARTA, KOMPAS.com – The Indonesian economy in the second quarter of 2021 stood strongly at 7.07 percent amid the country’s fierce struggles to contain the spread of coronavirus.

“The economy grew at an annualized pace of 7.07 percent in the second quarter of 2021,” the country’s Central Statistics Agency (BPS) head Margo Yuwono told a press conference on Thursday, August 5.

The growth rebound returned to a positive zone after the economy was negative in four consecutive quarters since the second quarter of last year during which the gross domestic product (GDP) contracted 5.32 percent. This year, in the January to March period the GDP contracted 0.74 percent.

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When viewed on a quarterly basis, the economic growth in the first quarter grew 3.31 percent (q-to-q). Cumulatively, in the January-June period this year compared to the January-June period of last year, the Indonesian economy grew 3.10 percent (c-to-c).

Margo said the economy in the first quarter of this year was valued at 4,175.8 trillion rupiahs ($291 billion) based on current prices, while GDP at constant prices of 2010 was at 2,772.8 trillion rupiahs ($193 billion).

Based on the expenditure on an annual basis (year on year), the components of exports, imports, investment, and household consumption, which the latter is the economy’s main growth engine, have increased in the second quarter of 2021.

The increase in revenue came from the extraordinary growth of car sales by 758.68 percent in the second quarter compared to 10.38 percent growth in the first quarter. “The increase in income is also reflected in the increase in PPh 21 [income tax for workers] by five percent and PPnBM [luxury tax] eight percent in the second quarter of 2021 compared to the second quarter of 2020,” he said.

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Previously, the government had projected positive economic growth in the second quarter of this year. The growth was in line with the target of the projection of about seven percent. This high projection took into account the base effect factor from the deep contraction in the second quarter of last year and the recovery in economic activity.