Islamic Economy Growth Down 1.72% Due to the Covid-19 Pandemic

The performance of the Sharia economy was also affected by the Covid-19 pandemic. The growth of Halal Value Chains (HVC) in 2020 fell by -1.72% compared to the previous year, which had achieved positive growth of 5.71%.

Despite the contracted growth, there were still priority HVC sectors that managed to achieve positive growth, namely the agriculture sector, which grew by 1.85%, and the halal food sector, which grew by 1.58%. These two sectors also made the highest contribution to HVC growth. Agriculture contributed 0.88% and halal food contributed 0.42%.

The implementation of Large-Scale Social Restrictions (PSBB) as part of the accelerated handling of Covid-19 impacted work processes in workplaces. However, agriculture and halal food are sectors that could operate during the PSBB period to provide services, so their growth remained positive despite slowing down.

Meanwhile, industries that are not essential sectors experienced negative growth. The growth of Muslim fashion was -8.87% and Muslim-friendly tourism was -12.53%.

Bank Indonesia (BI) stated that although the performance of the Sharia economy was impacted by Covid-19, it still performed better than the national economy. Indonesia's Gross Domestic Product (GDP) growth was -2.07% in 2020, down from 5.02% in the previous year.

In addition, the contribution of Halal Value Chains (HVC) to the Indonesian economy reached 24.86% of GDP in 2020.