The Bank Indonesia Representative of Central Java said that the province's economy had begun to improve even though the growth was still below 1%.
According to the Head of Bank Indonesia Representative for Central Java Province, Pribadi Santoso, BPS noted that the Central Java economy in the first quarter of 2021 grew -0.87% (yoy), or improved compared to the previous quarter which amounted to -3.34% (yoy).
On the expenditure side, this improvement was due to increased activity in all components with the largest contribution from foreign exports and investment.
The positive performance of foreign exports occurred in non-oil and gas exports, which grew 12.5% (yoy) in the first quarter of 2021. This achievement was driven by superior export commodities of textiles and textile products (TPT), furniture and footwear.
The increase in exports is driven by the realization of pending orders during 2020 and the addition of new orders in 2021, ”said Pribadi Santoso.
The improvement in investment performance is supported by the realization of several infrastructure projects that were delayed in 2020, particularly the development of national strategic projects which experienced a fairly rapid development in early 2021.
Meanwhile, the private sector, he continued, investment is carried out by increasing the utilization of production capacity to accommodate increased orders, especially those originating from global demand.
The results of the Bank Indonesia Business Activity Survey (SKDU) of Central Java Province show that the utilization capacity of business actors has increased from 70.42% in the fourth quarter of 2020 to 71.15% in the first quarter of 2021.
Meanwhile, household consumption as the largest contributor to the economy continued to contract, although it had started to improve compared to the previous quarter, "he said.
The Real Sales Index (IPR) in Central Java is still declining, indicating that people are delaying the purchase of secondary goods, especially clothing.
Despite this, consumer confidence in economic conditions has begun to improve.
Indicators of mobility and community activity in shopping centers and other public places tend to increase, as indicated by the decline in the growth of individual deposits which is estimated to be used for consumption.
Based on the main business fields, economic improvement was driven by agricultural business fields and infrastructure. Meanwhile, manufacturing and trade, which were the largest contributors to the economy, continued to experience contraction, although it was better than the preceding quarter.
The increase in demand for Central Java exports from trading partner countries encourages improvement in the performance of the manufacturing industry, as reflected in the Central Java Prompt Manufacturing Index (PMI), which increased from 43.20% in the fourth quarter of 2020 to 44.58% in the first quarter of 2021.
Meanwhile, the improvement in the performance of the trading business was driven by the end of the implementation of the PSBB to become micro PPKM.
Going forward, the economic recovery in Central Java is predicted to continue, supported by the increasing implementation of vaccination.
It is estimated that the increasing economic growth in Central Java will be supported by both global and domestic demand.
There are indications that Central Java's export product orders continue to increase in superior commodities such as footwear, processed wood, furniture and garments.
In addition, the realization of various government policies can further accelerate the economic recovery.
The government's fiscal relaxation policy through PMK No.20 / PMK.010 / 2021 which provides a PPnBM discount for the purchase of 4-wheeled vehicles and takes effect on March 1, 2021, has begun to encourage an increase in motor vehicle sales although it is still at a limited level.
