Indonesia Upbeat Economic Growth to Hit 8 Percent

TEMPO.CO, Jakarta - Coordinating Minister for Economic Affairs Airlangga Hartarto said Indonesia's economic growth could possibly reach 8 percent in the second quarter of 2021. This figure is higher than the target stated by President Joko "Jokowi" Widodo at seven percent.

“The growth is still projected at between 6.7 to 7.5 percent. The government believes that in this second quarter, it can reach 7 to 8 percent,” said Airlangga at today’s press conference, June 7.

He explained the projection was based on several reasons, such as the Purchasing Managers' Index that reached the highest level of 55.3. Besides, the sales of motorized vehicles also saw a significant increase. “Car sales are up by 228 percent year-on-year, while motorcycle sales soared by 227 percent year-on-year.”

Additionally, retail sales also climbed by 9.8 percent year-on-year and the consumer confidence index hit above one hundred percent. Airlangga said the growth of state spending as of the end of April 2021 had also risen by 60.43 percent.

Previously, Bank Indonesia (BI) Governor Perry Warjiyo forecasted the country’s economic development in the second quarter of 2021 could increase to around 7 percent or even higher.

“In the second quarter, Bank Indonesia estimates it will be around 7 percent, even based on the latest data, it can be higher than 7 percent,” said Perry, announcing the results of the virtual BI Board of Governors Meeting on Tuesday, May 25.

As for the overall economic growth in 2021, the government shared the same projection with Bank Indonesia issued in April 2021, which was between 4.1 and 5.1 percent.

Read: Sri Mulyani Forecasts Economic Growth Up to 8.3% in Q2 2021

CAESAR AKBAR | MUHAMMAD HENDARTYO