Indonesia’s economy bounced back in the second quarter to post its first growth in more than a year, but analysts said that the recovery might be short-lived as COVID-19 surges in the country.
Southeast Asia’s largest economy grew by 7.07 percent in the April-to-June quarter, compared with the same period last year, the Indonesian Central Statistics Agency said yesterday.
The figure is higher than a projection by the Central Bank of Indonesia, which predicted growth of 6.75 percent.
The expansion — the first positive figure in five quarters — was driven by an increase in exports and imports as Indonesia’s trading partners also saw greater activity.
“For the economy to keep growing, the key is how we manage the health sector, comply with health protocols and vaccinate people to reach herd immunity,” Central Statistics Agency head Margo Yuwono told a news conference.
Domestic consumption also contributed to the comeback with motorcycle and vehicle sales jumping 2.5 percent and 7.5 percent respectively, compared with the first quarter.
Greater business activity and more public mobility as a result of pandemic restrictions being relaxed also contributed to the recovery, Yuwono added.
However, analysts believe that Indonesia will struggle to record continued growth as a virus surge triggered by the Delta variant of SARS-CoV-2 wracks the country.
“Indonesia’s economy is struggling badly, with Q2 GDP data showing that the recovery lost some momentum even before the latest surge in virus cases,” Capital Economics Ltd senior Asia economist Gareth Leather said in a statement.
Indonesia has reported more than 3.5 million infections and more than 100,000 deaths from COVID-19, although official figures are widely believed to be an underestimate.
It has never implemented a full lockdown, but introduced restrictions early last month limiting travel and non-essential business activity.
Last year the country’s economy shrank 2.07 percent, as it entered its first recession since the 1997 Asian financial crisis.
The central bank has cut its GDP growth forecast for this year to between 3.5 percent and 4.3 percent.
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