Bank records encouraging trend in Indonesia’s economic recovery

Passengers wear masks in the arrival hall of Bali's Denpasar airport. CREDIT: AMILIA ROSA. Sketched by the Pan Pacific Agency.

JAKARTA, May 19, 2021, ANTARA. Indonesia’s economy is recovering despite a contraction of 0.74 percent (yoy) in the first quarter of 2021, Director of Treasury and International Banking of Bank Mandiri Panji Irawan stated, according to the ANTARA.

“In the first quarter of 2021, Indonesia’s economy contracted 0.74 percent (yoy). Despite the contraction, Indonesia’s economy, in general, has shown a continuing recovery trend,” Irawan remarked at a webinar on the Economic Outlook and Industry 2021 here on Wednesday.

The continuing recovery trend was supported by frontloading in the stimulus packages, government capital spending, and rising exports in accordance with the spike in global commodity prices, he noted.

Moreover, an improvement was recorded in various indicators of economic conditions, such as restoration in the level of public confidence from March to April, fueled by a decline in the daily cases of COVID-19 and the ongoing implementation of the vaccination program.

The Consumer Confidence Index (IKK) in April 2021 returned to an optimistic level, mirrored by the frequency and value of transactions, indicative of the consumers’ optimism regarding economic conditions in future.

“The resuming public confidence has triggered an increase in consumer spending ahead of the Eid celebrations,” he pointed out.

Furthermore, investment also showed a recovery, represented by a spike in imports of raw materials and capital goods, respectively at 10.2 percent yoy and 11.5 percent yoy in the first quarter of 2021.

“The flow of foreign direct investment (FDI) in the first quarter of 2021 also showed a positive growth of 14 percent,” he stated.

Irawan believed that the recovery in consumption and investment will be able to support future economic recovery, which during this year is projected to grow positively.

“Those are three signals that we believe in and hope to continue in the next three quarters, so that the economic pace will be positive,” he stated.

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