Jakarta (ANTARA) – Third quarter economic growth will depend on Urgent Community Activities (PPKM) restrictions, according to Finance Minister Sri Mulyani.
“The outlook for economic growth in the third quarter is expected to weaken, lower than the 6.5 percent forecast, as the emergency PPKM will be relatively tighter from July 3rd to 20th, almost the same situation as it was in February- March. âNoted Sri Mulyani during an online press conference here on Friday.
The Minister noted that the third quarter economic growth rate will be determined by the duration of the emergency PPKM. If the restrictions last only a fortnight and are effective in containing the number of COVID-19 cases, the impact of the restrictions on economic growth will be relatively limited in the third quarter.
“However, if the duration (of the restrictions) is up to a month, (emergency restrictions) have a significant impact, especially on consumption levels,” she said.
If consumption falls due to the impact of the emergency PPKM, the fall will affect the outlook for consumption growth.
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“It is estimated that the level of public consumption will be revised again and the components that may be affected by the decline in basic non-consumption areas are transport, communication, recreation and clothing,” she noted.
However, Sri Mulyani expects a stable investment rate as the restrictions allow construction work due to strict health protocols. Meanwhile, exports are also expected to grow strongly through May 2021 in line with export-import performance.
For the second quarter, the finance minister has forecast relatively good economic growth and is not affected by the increase in COVID-19 cases, as the increase in new cases took place in the second and third weeks of June. In the meantime, the new emergency PPKM will be implemented in early July.
“We saw a slight decline in June. However, we are optimistic that the decline is not much. Therefore, we estimate the prospects for economic growth in the second quarter at 7.1 to 7.5 percent for the time being,” the minister said.
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