Based on data published by the Central Statistics Agency (BPS), Indonesia experienced a shallower -0.74% (yoy) contraction in the first quarter of 2021 compared with -2.19% (yoy) in the fourth quarter of 2020.
"Domestic economic recovery momentum is building on the back of rapid external sector gains in response to the stronger global economic recovery and ongoing acceleration of fiscal stimuli," said BI Communication Department Head Erwin Haryono in a press release on Wednesday.
Economic gains in Indonesia have been recorded across nearly all GDP components on the expenditure side and economic sectors.
Exports expanded for the first time since the Covid-19 pandemic befell Indonesia, growing 6.74% (yoy) after contracting -7.21% (yoy) in the previous period.
The significant improvement was primarily driven by demand in Indonesia's main trading partners, namely China and the United States.
Meanwhile, positive external sector developments and stronger investment performance edged up import growth to 5.27% (yoy).
Government consumption accelerated to 2.96% (yoy) in line with the realisation of fiscal stimuli in the form of procurement, capital spending and social assistance disbursements.
Investment is also showing signs of improvement, recording a shallower -0.23% (yoy) contraction compared with -6.15% (yoy) in the previous period.
On the other hand, consumption in the household sector and non-profit institutions serving households (NPISH) remains subdued at -2.23% (yoy) and -4.53% (yoy) respectively given the mobility restrictions ongoing in several regions.
By sector, most economic sectors are seeing improvements, led by Information and Communication, Water Supply as well as Health Services.
Spatially, national economic growth momentum is supported by all regions, with Sulawesi-Maluku-Papua (Sulampua) moving into expansionary territory since the fourth quarter of 2020.
"Looking forward, Bank Indonesia expects economic growth to continue building momentum in line with the promising global economic recovery outlook and ongoing policy stimuli," the BI official stated.
According to the central bank, an orderly vaccination program rollout and disciplined application of Covid-19 protocols are still required to accelerate the recent domestic demand gains.
"To that end, Bank Indonesia will continue to strengthen policy coordination with the Government and Financial System Stability Committee, including implementation of the Integrated Policy Package, to support the ongoing national economic recovery," he stated.