Indonesia's economic growth is projected to exceed 4 percent
Indonesia's economic growth in the fourth quarter of 2021 will be exceeding of 4 percent as projected amid the rising of economic activities.
Economic growth or Indonesia's gross domestic product (GDP) growth in the fourth quarter of 2021 is projected to reach more than four percent.
A number of obstacles, especially the Covid-19 wave that had peaked in the third quarter, did not occur in the fourth quarter so that economic activity was much improved.
Economist and Executive Director of the Center of Reform on Economics (Core) Mohammad Faisal, said that economic activity at the end of last year was much smoother so that all business fields began to revive.
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"I estimate that the Indonesian economy in the fourth quarter will be much better than the third quarter so that economic growth can be around 5 percent," Faisal said, Sunday (6 February).
It was recorded that in the third quarter of 2021 economic growth fell to a level of 3.51 percent year on year (yoy) from the second quarter of 7.07 percent (yoy).
The decline in economic growth which was quite deep was mainly due to sluggish economic activity when Indonesia experienced the peak of the third wave of Covid-19 at the beginning of the third quarter.
Faisal said, entering the last quarter of 2021, of course, the business sector which is the most dominant contributing to GDP, of course, is much influenced by community mobility. The reason is that community mobility has increased again in the fourth quarter even though the government still requires health protocols.
The manufacturing sector contributed the most to economic growth in the fourth quarter. This sector in the third quarter also still grew positively with a figure of 3.86 percent yoy.
Then, the trade and agriculture sectors also contributed to the formation of GDP at the end of the year. In the trade sector, for example, amid the Covid situation, export and import activities remained high, although this was also helped by rising world commodity prices.
Meanwhile, the agricultural sector also has proven resilience since the beginning of the pandemic, which has remained in a positive growth trend.
"Actually, almost all business sectors are projected to grow better than the previous quarter because business activities really have a big impact on people's mobility.
The University of Indonesia Institute for Economic and Community Research (LPEM UI) predicts that the Indonesian economy will grow 3.7 percent in 2021. This is driven by growth in the fourth quarter which is estimated at 5.1 percent.
LPEM UI Macroeconomic and Financial Market Economist Teuku Riefky said the prediction was in line with the accelerated economic recovery.
"The economy in the fourth quarter of 2021 is estimated to reach 5.1 percent which makes the 2021 economy at 3.7 percent," he said during the Economic Outlook webinar, Friday (4 February).
The economy in the fourth quarter of 2021 will be able to grow high due to the easing of social and economic activities. This is also as the second wave of the Delta variant of the Covid-19 pandemic ends.
Higher consumer and business confidence is expected to continue in the fourth quarter of 2021 so that we see economic growth in the fourth quarter of 5.1 percent.
Riefky said the implementation of PPKM to contain the spread of Covid-19 had limited the transmission of Covid-19 and hit the transportation & storage and accommodation, as well as food and beverage sectors.
"In addition to agriculture, the main contributory sectors to the Indonesian economy, such as manufacturing, wholesale & retail trade, and construction, also experienced slower growth in the third quarter of 2021," he said.
