Indonesian economy grew by 3.69%

 Indonesian economy grew by 3.69%

After the first contraction in two decades in 2020, Southeast Asia's largest economy has recovered with a growth rate of 3.69% in 2021.

Data released on Monday (February 7) by the Indonesian Government showed that the country's GDP in 2021 increased by 3.6%, recovering from a decrease of 2.07% in 2020. Before that, the Ministry of Finance Indonesia is forecast to grow at 3.7%. However, the official results are still below pre-pandemic levels of 5% per year.

Indonesia's economic growth accelerated in the last quarter of last year, reaching 5.02%, after restrictions were eased and exports hit record highs, helped by rising commodity prices. The Reuters poll had expected fourth-quarter growth of 4.9%.

People walking inside a shopping mall in Indonesia. Photo: Reuters

People walking inside a shopping mall in Indonesia. Photo: Reuters

Indonesian GDP growth is expected to accelerate this year, but concerns remain as the country enters a third Covid-19 wave fueled by the Omicron variant. Recently, new cases have increased by nearly 30,000 a day, compared with less than 300 at the beginning of the year.

Along with that, the potential financial market volatility due to global monetary tightening and Indonesia's return to monetary and fiscal stimulus measures, will also be the challenges of this year.

The International Monetary Fund has lowered its 2022 growth forecast for Indonesia to 5.6% from 5.9% previously, and cut its 2023 forecast from 6.4% to 6.4%. 6%.