During a press conference after a plenary cabinet session in Jakarta, Monday, Finance Minister Sri Mulyani Indrawati highlighted that the government still sees the gross domestic product growth in the second quarter to reach seven percent yoy due to the impact of the new Emergency Restrictions on Community Activities (PPKM) being felt in the third and fourth quarters of 2021.
“In the first quarter, economic growth was recorded at minus 0.7 percent. In the second quarter, we estimate economic growth at seven percent, so realization in the first semester of 2021 is at 3.1-3.3 percent," she noted.
Sri Mulyani believes that the impact of Emergency PPKM will be felt in the third and fourth quarters of 2021.
If the government's target to reduce the rate of COVID-19 transmission is effectively realized, then community activities can likely recover in August 2021 owing to relaxation of restrictions on community mobility. If that occurs, economic growth in the third quarter of 2021 could exceed four percent.
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"However, if the extended restrictions due to COVID-19 are high, then the third-quarter economic growth could decrease by around four percent. This is something to watch out for,” the former World Bank Executive Director stated.
Hence, Sri Mulyani noted that public adherence to the COVID-19 prevention health protocols and the acceleration of COVID-19 vaccination are critical parameters for fighting the pandemic and restoring economic activity.
"Acceleration of vaccination is an important requirement, and therefore, the number of vaccines should be increased to two million per day. If we want vaccination to be completed before the end of this year, we need to vaccinate up to three million per day during the October-November period," she expounded.
Sri Mulyani projects inflation rate in the first semester of 2021 at 1.33 percent, or lower than the three-percent assumption in the 2021 State Budget.
The average exchange rate of the rupiah against the greenback in the first semester of 2021 was recorded at Rp14,299 per US dollar or stronger than the assumption of Rp14,600 per US dollar in the 2021 State Budget.
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