REPUBLIKA.CO.ID, JAKARTA - Indonesia is still struggling to raise economic growth to a positive level. In 2020 and the first quarter of 2021, Indonesia's economy will grow negatively. Indonesia's biggest economic challenge currently is in the second quarter of 2021.
President Joko Widodo (Jokowi) emphasized that the second quarter will be the determining period for Indonesia's economic growth in 2021. The high and low economic growth throughout the year, said Jokowi, is determined by the achievements in the second quarter.
"April, May, June will determine economic growth. We can jump up or not. Otherwise, our next quarter will be really tough," said President Jokowi at the Regional Heads Meeting in 2021, Wednesday (14/4) .
In order to achieve the target of positive economic growth throughout 2021, Jokowi has set a target for the economy to grow above 7 percent in the second quarter. The goal is to ensure that national economic growth recovers from the downturn caused by the pandemic.
"We must be able to increase economic growth at least above 7 percent in the second quarter. It is not something easy. But if there is support from the regions, I believe this will be something easy," said Jokowi.
One of the moves that the government believes is most effective in boosting growth is to streamline investment flows. Jokowi also asked regional heads to actually roll out the red carpet for investors so that jobs can be created.
The absorption of employment is believed to be able to improve the welfare of residents in the regions and lead to increased consumption.
"Regions should not slow down investment permits. Because investment creates jobs. This means that slowing down permits will also slow down job creation in the regions led by you," said Jokowi.
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The government is still predicting economic growth in the first quarter of 2021 in the range of minus one percent to minus 0.1 percent. This projection is better than the growth position in 2020, minus 2.07 percent.
Finance Minister Sri Mulyani said the growth projection was based on economic activity in Indonesia which had begun to show a recovery. This is in line with the number of Covid-19 cases decreasing to around 4,000 per day compared to the peak of cases which reached more than 14,500 cases per day.
Sri Mulyani projects that Indonesia's economic growth in 2021 will still be in the range of 4.5 percent to 5.3 percent. Meanwhile, global institutions such as the OECD estimate that Indonesia's economic growth will be at the level of 4.9 percent, the IMF estimates 4.2 percent, and the World Bank at 4.8 percent.
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