Coordinating Minister for Economic Affairs Airlangga Hartarto is optimistic that the Indonesian economy would grow between 5.5 percent and six percent in the fourth quarter (Q4) of 2021.
“If we want to grow at four percent this year, then in the fourth quarter, we must increase it (economic growth) to around 5.5 percent to six percent,” Airlangga stated at the 2022 Economic Outlook here, Monday.
The growth can be achieved due to several indicators right from the Manufacturing Purchasing Managers’ Index (PMI) to the consumer confidence index that was positive.
As a result, in 2021, the economy can grow by four percent and increase to 5.2 percent in 2022.
When viewed from the various components of the gross domestic product (GDP) expenditure, all of them showed positive growth in exports, imports, household consumption, investment, and government spending in the third quarter of 2021.
The minister estimated that household and government consumption would increase again in the fourth quarter of 2021.
“In the third quarter, these two components grew positively. In July, the two components decreased, as the government implemented strict community activity restrictions (PPKM) due to the Delta Variant. However, now, the two components are relatively under control,” he noted.
Airlangga stated that sector wise, most of the main sectors recorded positive, consistent growth, especially the information and communication sector, at 5.51 percent; health services, at 14 percent; agriculture, at 1.31 percent; and real estate, at 3.42 percent.
Growth in the real estate sector was significantly supported by the government-borne value-added tax incentive. The incentive also succeeded in mobilizing 170 supporting sectors of the real estate sector.
Likewise, the manufacturing industry, which grew 3.68 percent, was helped by the luxury goods sales tax (PPnBM) incentives in the automotive sector. The incentive also made the supply chain move much more rapidly.
“It is estimated that this year, automotive sales can return to 850 thousand and automotive exports are expected to increase to 300 thousand,” Coordinating Minister Airlangga remarked.
Bank Indonesia (BI) had earlier recorded a surplus of US$10.7 billion in the balance of payments (BOP) in the third quarter of 2021 after experiencing a deficit of US$0.4 billion in the previous quarter.
“Thus, this supports external resilience,” Head of BI’s Communication Department, Erwin Haryono, noted in an official statement received in Jakarta on Friday.
Meanwhile, foreign exchange reserves at the end of September 2021 reached US$146.9 billion, higher than US$137.1 billion at the end of June 2021.
The foreign exchange reserve position is equivalent to financing 8.6 months of imports and servicing government external debt, as it is above the international adequacy standards.
In the third quarter of 2021, the current account recorded a surplus that was mainly supported by a significant increase in the balance of trade (goods) surplus.
The current account in the reporting period recorded a surplus of US$4.5 billion (1.5 percent of the GDP) after a deficit of US$2.0 billion (0.7 percent of the GDP) during the previous quarter.
A surplus in the goods balance drove this positive performance due to an increase in non-oil and gas exports that aligned with strong demand from trading partner countries and the continued increase in prices of major export commodities in the international market.
Source: Antara News