Indonesia’s economy recovered in the second quarter, posting its first rise in more than a year, but analysts warned that the recovery could be fleeting as Covid-19 surges.
The Central Statistics Agency (BPS) reported Thursday that the largest economy in Southeast Asia increased by 7.07 percent in the April-June quarter compared to the same period last year.
The percentage is greater than the Central Bank of Indonesia’s forecast of 6.75 percent growth.
The expansion, the first in five quarters, was driven by an increase in exports and imports as Indonesia’s trading partners saw increased activity.
“The key to the economy’s continued growth is how we manage the health sector, adhere with health protocols, and vaccinate people to achieve herd immunity,” BPS chief Margo Yuwono said at a news conference.
Domestic consumption also played a role in the rebound, with motorbike and automobile sales increasing by 2.5 and 7.5 percent, respectively, compared to the first quarter.
Greater commercial activity and increased public mobility as a result of pandemic restrictions being lifted also aided the recovery, according to Yuwono.
Analysts fear Indonesia will struggle to maintain its growth as a viral outbreak caused by the Delta type wracks the country.
“Indonesia’s economy is struggling poorly, with Q2 GDP figures revealing that the recovery lost some pace even before the new rise in viral infections,” said Gareth Leather, senior Asia economist at Capital Economics.
The archipelago has reported over 3.5 million Covid-19 infections and over 100,000 fatalities, while official estimates are widely regarded to be an underestimate.
It has never conducted a full lockdown, but it did impose limits on travel and non-essential commercial activity in early July.
The country’s GDP shrank 2.07 percent last year, ushering in its first recession since the Asian financial crisis of 1997.
The central bank has reduced its GDP growth prediction for 2021 to between 3.5 and 4.3 percent.