Finance minister, Sri Mulyani Indrawati sees Indonesian economic growth will depressed in the second quarter of 2020 caused of the heavy COVID-19 impact- Photo by Finance Ministry Office

JAKARTA (TheInsiderStories) – In worse scenario, Finance minister Sri Mulyani Indrawati, sees Indonesia’ economic growth could be in the range 0 – 2.5 percent if the COVID-19 outbreak lasts for six months. But it the pandemic in shorter time the GDP still above 4 percent.

“If the duration of COVID-19 is three to six months and lockdown in several continues and affected various sectors our economic growth could in the range of 0 – 2.5 percent. We also hope for the discovery of an anti-virus vaccine. If it can be done quickly, this will certainly have a short impact,” she told reporters during the video conference today (03/20).

Therefore, Indrawati revealed, the government do preparations based on the possibility of happening by reallocates the central and regional government spending to tackle the pandemic.

“We do not expect that to happen. So safety net measures must be done. This is the focus that we do lead by the coordinating minister for the economic affairs and the FSA (Financial Service Agency),” said the minister.

For that the government now explores the potential reallocation budget worth of Rp62 trillion (US$4.0 billion) for safety net measures. She hope within two days from now, the Budget Implementation Entry List will approves and a legal protection rule out so the funds can immediately use to tackle the virus outbreak.

Earlier, she announced that the deficit of 2020 State Budget to 2.5 percent, from initially 1.76 percent of gross domestic products (GDP), said finance minister. The additional deficit its estimating worth of Rp120 trillion.

“From the State Budget side, the deficit will increase 2.5 percent of GDP after we provide a new stimulus 0.8 percent of GDP,” Sri Mulyani Indrawati told reporters on March 13.

The government just announced has prepared second stimulus with total amount Rp147.90 trillion for the manufacturer and workers to help the domestic economy from COVID-19 effects. The nation prepared fiscal incentives Rp22.9 trillion. Beside, the government also prepared non-fiscal stimulus is related to the simplification of the export import permits.

In this year, the government set economic growth at 5.3 percent, inflation at 3.1 percent, the average exchange rate of Rp14,000 per US Dollar, the state treasury coupon rate of 5.4 percent, oil price US$63  barrel. oil lifting around 755 thousand barrels, and lifting of natural gas at 1.19 million barrels.

Then, the state revenues are set around Rp2,223 trillion and the government spending Rp2,540.4 trillion. With these assumptions, the government expect an unemployment rate at 4.8 – 5.0 percent, poverty rate 8.5 – 9.0 percent, GINI ratio of 0.375 to 0.380, and a human development index of 72.51.

US$1: Rp15,500

by Linda Silaen, Email: linda.silaen@theinsiderstories.com