A rattan craftsman from Cirebon, West Java, Rasyidi, varnishes a baby carrier in Cibitung, Bekasi regency, West Java, on Monday (7/8). Craftsmen in the area are facing the problems of expensive raw material and a decline in public interest in rattan products.
JAKARTA, KOMPAS – Household consumption and investment were the main drivers of economic growth in the second quarter of 2017.
Household consumption continued to increase, albeit at a slower rate, while investment, both private and government, recorded the highest growth, at least since 2013.
The Central Statistics Agency (BPS) announced on Monday that Indonesia\'s aggregate economic activities, also referred to as the gross domestic product (GDP), totaled Rp 3.36 quadrillion (about US$252.68 billion)in the second quarter of 2017.
The economy grew 5.01 percent in the second quarter, the same as was recorded in the first quarter, but below the 5.18 percent growth recorded in the second quarter of 2016.
Cumulative growth in the first semester of 2017 was 5.01 percent. The government and the House of Representatives agreed to increase economic growth to 5.2 percent this year.
In comparison, economic growth in the second semester of 2016 was 5.05 percent. By the end of 2016, economic growth was 5.02 percent.
BPS head Suhariyanto said at a press conference in Jakarta on Monday that the economic growth of 5.01 percent in the second quarter of 2017 fell below the expectation of many analysts. However, the country’s economic performance was still relatively good, as it occurred amid global economic uncertainties and a fall in commodity prices in the world market.
From the sectoral aspect, the top three drivers of economic growth –manufacturing, agriculture and trade– continued to grow positively. However, their growth rate slowed, compared with both the previous quarter and the same period last year.
From the aspect of expenditure, household consumption remained the main driver of overall economic growth. It contributed 55.61 percent of the GDP in the second quarter. Its growth during the period was 4.95 percent, or almost equal to the 4.94 percent recorded in the first quarter. However, this was lower than the 5.07 percent growth recorded in the second quarter of 2016.
Purchasing power
The deputy head of BPS for balance sheets and statistical analysis, Sri Soelistyowati, explained that food consumption remained high in the second quarter of 2017, such as at restaurants.
Public spending also increased during second-quarter holidays, which amounted to 39 days. Referring to data from the Financial Services Authority (OJK), Soelistyowati said debit transactions did not increase significantly during the period. Instead, deposits in banks increased substantially. The same trend also occurred in financial transactions.
"From these indications, I assume the general purchasing power did not decline, but the people held their spending in check and also invested," she said.
Still from the expenditure aspect, investment also remained a major driver of economic growth in the second quarter of 2017. Investments in the second quarter of 2017 grew 5.35 percent, contributing 31.36 percent of the GDP. It was the highest investment growth at least since 2013.
The Center for Economic and Public Policy Studies head at Gadjah Mada University, Tony Prasetiantono, said the rise in investment was good news. While he said household consumption needed to be reduced and investment needed to be increased.
Separately, Bank Indonesia governor Agus DW Martowardojo said that in general, the economy showed improvement. He was optimistic that growth in the third and fourth quarters would be above 5.2 percent, so that annual GDP growth would reach 5 percent - 5.4 percent.
