Indonesia Posts 7.07% Economic Growth in Q2 of 2021

Head of the BPS Margo Yuwono

Indonesia has recorded 7.07 percent economic growth (year-on-year) in the second quarter of 2021, the Statistics Indonesia (BPS) has announced.

“If we compare the economic growth with that of second quarter last year, Indonesia’s economic growth (in the second quarter of this year) is 7.07 percent,” Head of the BPS Margo Yuwono said, Thursday (05/08).

According to Margo, the overall Indonesia’s economy in Semester 1 of 2021 grew by 3.10 percent compared to that of Semester 1 of 2020.

On the production side, he added, the growth is generated in all business sectors, including transportation and warehousing (25.10 percent), accommodation, food and beverages (21.58 percent), and processing industry (6.58 percent)

“64.85 percent of GDP [Gross Domestic Product] comes from industry, agriculture, trade, construction, and mining sectors, meaning that economic growth of those sectors has a major impact on overall economic growth,” Margo said.

He added that on the expenditure side the component of exports of goods and services recorded the highest growth of 31.78 percent, while household consumption recorded 5.93 percent growth.

“84.93 percent of the GDP in the second quarter of 2021 comes from household consumption and investment, meaning that the growth of household consumption and investment has a major or dominant influence on the overall economy,” Margo said.

He went on to say that the Government consumption, which is also the driver of economic growth, grew by 8.06 percent.

Margo pointed out that economic growth in the second quarter of 2021 was also generated by improvement in controlling COVID-19 pandemic, including vaccine rollout and the number of daily confirmed cases of COVID-19 in the second quarter of 2021 which tends to be lower than that in the previous quarter.

“This condition improves people’s confidence so that the people mobility in various areas in the second quarter of 2021 increased compared to the first quarter of 2021 and the second quarter of 2020,” he said.

Margo further said that Indonesia’s economic growth is supported by improved export and import performance.

Indonesia’s export performance increased by 55.89 percent year-on-year. while also growing by 10.36 percent compared to the first quarter of 2021.

The growth was also influenced by improvement in the global economy, especially in Indonesia’s trading partners, including the United States which grew by 12.2 percent, China (7.9 percent), Singapore (14.3 percent), South Korea (5.9 percent), Vietnam (6.6 percent), Hong Kong (7.5 percent), and the European Union (13.2 percent).

“The increase in exports will have a double effect on the supporting sectors, which will also grow. So the role of exports is pivotal in stimulating Indonesia’s economic growth,” Margo said.

In addition to exports, he added, Indonesia’s import also grew by 50.21 percent (year-on-year) and 9.88 percent (quarter-to-quarter). The sector that generated high growth was imports of raw materials, which amounted to 57.80 percent (year-on-year).

“The high domestic demand for raw materials shows that the domestic economy recorded growth in the second quarter,” Margo said, adding that the increase in imports is also recorded in capital goods by 29.11 percent (year-on-year) and consumption goods by 31.50 percent (year-on-year).

“The data shows that our economy in the second quarter has recorded growth, both in terms of exports and the value of imports,” Margo remarked. (UN) (RI/EP)