Anticipating the Unexpected:
Economic Recovery in Turbulent Conditions
The spread of the Delta variant in the country has reduced the promising economic growth trend from 7,07% (yoy) in the second quarter of 2021 to only 3,51% (yoy) in the third quarter of 2021 due to declining consumption and business activity in various sectors. dependent on physical activity stops. The implementation of PPKM to limit the transmission of Covid-19 has hit the transportation & storage and accommodation & FnB sectors hard. Apart from agriculture, the main contributor sectors to the Indonesian economy, such as manufacturing, wholesale & retail trade, and construction, also experienced slower growth in the third quarter of 2021. The second wave also restrained the growth of all components of GDP expenditure, especially household consumption as the largest contributor to GDP which only grew 1,03% (yoy) in the third quarter of 2021, down from 5,93% (yoy) in the previous quarter. In the midst of the ongoing crisis, credit performance has shown good prospects for the whole of 2021 as it has gradually improved along with improving business and consumer sentiment along with the intensity of economic recovery compared to the downward trend during 2020. However, the inflation rate throughout the year 2021 is still below BI's target. Low inflation in 2021 indicates that domestic demand has not fully recovered.
