"Credit which started to record high growth in June 2021 at 1.83 percent (year to date), so that the prediction of economic growth in the second quarter of 2021 of 7 percent can be achieved," Wimboh Santoso, chairman of the board of commissioners of OJK, said in a written statement providing details on the board's meeting here on Wednesday.
The second quarter, or April-June, was the period when the government had not implemented the emergency public activity restrictions (PPKM), he said.
"The PPKM was enforced on July 3, 2021, and later changed to PPKM level 4, level 3 and so on," he noted.
Thus, during the second quarter, there was increased community mobility, which boosted demand and stimulated economic activities, he said. Other economic indicators in the second half of the year also indicated an improvement and were in line with the pace of national economic recovery, he pointed out.
However, there were obstacles that slowed the pace of economic recovery starting June this year due to an increase in the number of active COVID-19 cases, Wimboh said.
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"The increase in active cases in June 2021 held back community activities, (as) reflected in the decrease in community activity from 6.7 percent (May 2021) to 5.2 percent, which could slightly affect the original prediction," he added.
Indonesian President Joko Widodo (Jokowi) had, at the end of June 2021, expressed confidence that Indonesia would emerge from the negative economic growth trend -- observed since the second quarter of 2020 -- in the second quarter of 2021.
The President said he was optimistic that economic growth would touch 7 percent in the second quarter of 2021, after contracting to minus 0.74 percent in the previous quarter.
The President's said his confidence rested on improvements in several economic indicators, such as the Purchasing Managers' Index for the manufacturing industry, which was recorded at 55.3 in May 2021; the positive movement of the consumer confidence index and retail sales; and soaring exports, which grew 58 percent in May 2021 to US$16.6 billion.
"We are still optimistic that it (the economy) will grow in the second quarter of 2021, God willing, around 7 percent," the President remarked.
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Translator: Indra AP, Azis Kurmala
Editor: Fardah Assegaf
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