Minister: Household Consumption Records Higher Growth Than That of Before Pandemic

Minister of Trade Muhammad Lutfi

The Indonesian economy in the second quarter of 2021 has grown positively by 7.07 percent compared to that in the same period last year. This growth was sustained, among others, by the household consumption component which grew by 5.93 percent.

“Consumption growth is at the level of 5.93 percent, even better than before the pandemic period which stood at 5.02 percent and 5.18 percent in the first and second quarters of 2019 respectively,” said Minister of Trade Muhammad Lutfi, Thursday (5/8).

According to Lutfi, Indonesia’s Gross Domestic Product (GDP) is dominated by household consumption which reached 57.66 of GDP in 2020 and 57.23 in the second quarter of 2021. Thus, in order to maintain national economic growth, people’s purchasing power must also be maintained.

In addition to the household consumption component, he added, Indonesia’s economic growth was also sustained by the formation of fixed capital (investment) which grew by 7.54 percent, exports by 31.78 percent, imports by 31.22 percent, and government spending by 8.06 percent.

“Import growth is 31.22 percent but 90.1 percent of it came from raw/auxiliary materials and capital materials,” he emphasized.

He went on to explain that from the production side, economic growth was sustained by sectoral growth. These include the transportation and warehousing sectors which grew by 25.1 percent, accommodation and food and beverage by 21.58 percent, trade including retail by 9.44 percent, and the manufacturing industry by 6.58 percent, he added.

“The Consumer Confidence Index (CCI) from January to February 2021 is still in the range of 88 points, but May-June 2021 saw a 107-percent growth,” he said.

The Minister further explained that in the second quarter of 2021, car sales also grew by 758 percent, while motorcycle sales grew by 268 percent.

“Growth in retail sales also occurred in the food and beverage industry, spare parts, clothing, and other goods,” he remarked. (TGH/UN) (EST/MUR)