Still in Recession, RI's Q1 Economy Forecasted to Grow -1% to -0.1%

Jakarta, CNBC Indonesia - Sri Mulyani Indrawati, Minister of Finance, revealed that Indonesia's economy in the first quarter of 2021 still grew negatively or contracted. This means that Indonesia has not 'passed' the economic recession test.

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"For the first quarter of 2021, we at the Ministry of Finance estimate it will be in the range of -1%, the deepest to -0.1%. We expect it to be in the neutral zone, close to -0.1%,"

Sri Mulyani said in a press conference on the March edition of our State Budget. 2021, Tuesday (23/3/2021).

Sri Mulyani added that people's purchasing power was still weak due to the impact of the corona virus pandemic (Coronavirus Disease-2019/Covid-19). This can be seen from the slowing development of inflation.

"Last February, BPS (Central Statistics Agency) said inflation was 1.38% YoY and 0.1% MtM. We are paying attention to this inflation because it involves aspects of people's purchasing power," said Sri Mulyani.

If Indonesia's Gross Domestic Product (GDP) returns to minus, then the economic contraction will occur for four consecutive quarters. Even though the contraction of two consecutive quarters is already in the category of recession.

However, Sri Mulyani emphasized that the Indonesian economy has room to rise in the second quarter of 2021. and the increased mobility of society, the 'wheel' of the economy can turn faster.

"People's mobility decreased when the Covid-19 increased. However, in March there was a recovery in line with the decline in Covid-19 cases. If vaccination continues and is successful, we hope the trend can increase again and (the economy) can accelerate in the next second quarter," he said.