Economic Growth in 2020 to Plunge by -2.07%

JAKARTA. The Statistics Indonesia (BPS) recorded Indonesia's economic growth in 2020 contracted by 2.07% year on year (yoy)

This is in line with the economic growth rate in the fourth quarter which fell 2.19% from the fourth quarter of 2019, or a decrease of 0.42% when compared to the third quarter or quarter to quarter (q to q).

Consequently, Indonesia is currently still unable to get out of the recession zone. Despite the trend, economic growth in the fourth quarter was better than the third and second quarters of 2020.

BPS Head Suhariyanto said Indonesia's economy as measured at constant prices was recorded at IDR 2,709 trillion and at the current price of IDR 3,929.2 trillion.

Based on its components, the largest contraction occurred in Gross Domestic Fixed Capital Formation (PMTB) or investment which grew minus 4.95%, followed by consumption expenditure for The Non-Profit Institutions Serving Households ( LNPRT) of -4.29%.

Meanwhile, household consumption grew by -2.63%, and government consumption grew by 1.94% positively.  While exports grew negatively -7.70% as well as imports which were also negative -14.71%.

Government Optimism

With the realization of this growth, the government assesses that Indonesia's economic development has shown improvement. 

Considering the contraction that occurred in the fourth quarter of 2020 is better when compared to the second and third quarters. Therefore, the government is optimistic that Indonesia's economic condition will be better in 2021. 

Apart from the economic growth figures, the government's optimism was also strengthened by other data, such as the Manufacturing Purchasing Managers Index (PMI) indicator in January 2021 which again increased from 51.3 in December 2020 to 52.2 in January 2021, even the highest level in the last six years.