Mandiri Sekuritas predicts Indonesia's economic growth will reach 4.1 to 4.4 percent this year. Mandiri Sekuritas Chief Economist Leo Putera Rinaldy said the determination of this economic growth projection was based on the continued domestic and global economic recovery despite the Covid-19 pandemic still hitting Indonesia. "Overall, our full year forecast is projected 4.1-4.4 percent. In 2022, we expect it will reach the pre-Covid-19 level, slightly about 5 percent," Leo explained in a press conference, Tuesday (29/6/ 2021).
The economic recovery in question is reflected in the consumption and investment side. According to Leo, public consumption until May 2021 has increased even though it is still dominated by the consumption of the upper middle class. "However, starting in the second quarter, mid-to-low consumption will also improve due to the government's fiscal spending," he continued. Meanwhile, in terms of investment, it is more broad-based or diverse. "Non-construction private investment is dominated by export-based sectors so that investment growth is sustainable," he said.
The Minister of Finance, Sri Mulyani Indrawati, admitted that she was pessimistic that the projected economic growth could reach 8.3 percent in the second quarter of 2021. This is due to the surge in Covid-19 cases that have occurred in recent times. She said the increase in COVID-19 cases on Java Island would have consequences for the national economic recovery. Moreover, so far the island of Java has the largest contribution to the economy, so it will affect the outlook of the government. "The second quarter, which was delivered last week, was 7.1 to 8.3 percent. Along with the increase in COVID-19, maybe the upper end will be lower," he said in a video conference on our State Budget, Monday (21/6/2021).
Even so, Sri Mulyani is still optimistic that economic growth in the second quarter will remain in the positive zone. Various economic indicators ranging from the manufacturing index, consumer confidence, electricity consumption, to motor vehicle sales have grown. "But we know that in addition to rebounding and recovering in the second quarter, last year in the second quarter there was a 5.3 percent contraction, on the one hand there was a rebound or natural base effect. On the other hand, there was also a stretch of the economy, we have to look at these supporting factors. ," he said.
The State Treasurer added that the increase in Covid-19 cases such as the one in DKI Jakarta needed serious attention from the government. If the handling is not taken seriously, then we are worried that the economic recovery efforts that have been carried out since the beginning of the year could be depressed again. "So the focus of attention this week will affect economic growth in the second quarter, because the second quarter is until June. Therefore, Covid-19 must be controlled, because otherwise we can't normalize anything, be it education, social, religious and the economy," she concluded.
