Indonesian economic growth will still be in the negative zone at least until Q1/2021 and will only grow positively in Q2/2021. Based on data from Statistics Indonesia (BPS), the Indonesian economy in 2020 experienced a growth contraction of -2.07% compared to 2019 (annual cumulative or c to c). Meanwhile, the Indonesian economy in Q4/2020 against Q4/2019 experienced a growth contraction of -2.19% (y to y). The contraction was caused by the decrease in the performance of various sectors due to the pandemic. From the production side, the Transportation and Warehousing Business Field experienced the deepest growth contraction of -13.42%. Meanwhile, from the expenditure side, the components of the export of goods and services experienced the deepest growth contraction of -7.21%.

  1. Visi Globalindo Data Utama (VISI) estimates that by the end of Q1/2021 the Indonesian economy grew at -1.43% (y to y). This figure is influenced by growth in terms of expenditure, production and investment. From the expenditure side, the various factors forming consumption are estimated as follows:
  • Household consumption grew -1.59% in Q1/2021, better than Q4/2020 which grew -3.61%.
  • Non-Profit Institutions Serving Households (LNPRT) grew stagnant, namely -2.16% in Q1/2021 compared to Q4/2020 which grew -2.14%.
  • Government consumption grew 2.55% in Q1/2021 or an increase compared to Q4/2020 which grew 1.76%.
  • Gross Domestic Fixed Capital formation, which is expenditure on capital goods such as buildings, machinery, equipment, vehicles and others, grew -6.49% or decreased compared to Q4/2020 which grew -6.15%.
  • Exports of goods and services grew -11.10% in Q1/2021 or much lower than Q4/2020 which grew -7.24.

From the production side, it is estimated that the Transportation and Warehousing Business Fields will still experience the deepest contraction, namely -14.57%. Meanwhile, the Health Services and Social Activities sector is the sector with the highest growth, amounting to 16.09%, followed by the Information and Communication sector which is estimated to grow 10.99%, and other sectors are estimated to be still stagnant.

Meanwhile, from the investment side, it experienced improvement as indicated by an increase in the Manufacturing Purchasing Managers’ Index (PMI) to 53 levels and imports of raw materials which also increased by 26.4% in March 2021.

Even though the growth in Q1/2021 was generally better than the fourth quarter of 2020, the growth was still negative because the general public and businessmen were still on guard and it was seen that they were still holding back consumption. Household consumption, which is the largest contributor to economic growth, has still not recovered from the Covid-19 pandemic.

It is predicted that Indonesia will only come out of the negative zone in Q2/2021. This is boosted by the vaccination program that the government has started since the beginning of the year, which is considered to provide positive sentiment because people are starting to believe that the pandemic will end or at least can be suppressed. Apart from that, the moments of Ramadan and Eid al-Fitr are also expected to boost the level of domestic consumption.