7.07 Percent Economic Growth in Q2 Is Pseudo-growth: Indef

TEMPO.CO, Jakarta - The Head of the Industry, Trade, and Investment Center at the Institute for Development of Economics and Finance (Indef), Andry Satrio, said the 7.07 percent economic growth in the second quarter of 2021 was pseudo-growth. This was because the growth rate was based on the rate in Q2 of 2020, which has a very low base of -5.32 percent.

“Judging from several indicators (during the second quarter), the activity is not yet normal since the health protocols such as the social distancing rule are still ongoing, so that causes the economy to grow limitedly. So is this the end of a recession or pseudo-growth, this is indeed pseudo-growth,” said Andry in an online discussion on Friday, August 6.

Andry said the national economic development in Q2/2021 had not yet reached the average economic growth before the COVID-19 pandemic, which was 5 percent. 

Compared to the growth in the pre-pandemic period, the 7.07 percent economic growth was only equal to 3.87 percent or below the growth in Q2/2019 at 5.05 percent and that in 2018 at 5.27 percent.

“If we talk about GDP, it surely leapt to 7 percent or more than the average natural growth thus far. But it's not fair if this means [the national economy] has returned to normal. The best possible way is to compare it with previous growths, and the result is a decline,” said Andry.

Read: Sri Mulyani Attributes 7.07 Percent Growth to Excellent Recovery Strategies

FRANCISCA CHRISTY ROSANA