Jakarta, CNBC Indonesia – Minister of Finance Sri Mulyani Indrawati assessed that Large-Scale Social Restrictions (PSBB) are one of the health protocols that must be carried out to reduce the spread of Covid-19. However, on the other hand, PSBB has a bad impact on the economy.
According to him, PSBB had an impact on economic contraction not only in Indonesia but in almost all countries in the world.
“PSBB or even in various countries they have carried out a total closure or lockdown which has had a very serious impact on the socio-economic conditions of the community,” he said in welcoming new ITB students quoted on Friday (11/09/2020).
He continued, in Indonesia the PSBB began in early March so that the economy immediately contracted. In the second quarter of 2020, the economy contracted by minus 5.32%.
“Indonesia carried out the PSBB, especially at the beginning of the Covid, namely in March, April, May, so we will see a significant direct socio-economic impact. Our economy in the second quarter experienced a deep contraction,” he said.
This deep contraction occurred because when the PSBB was implemented all economic activities stopped. In fact, there were massive layoffs in various companies due to the absence of production activities.
“This negative growth illustrates economic activity in terms of demand, whether consumption, investment, export, and even government activities have decreased and in terms of production, whether it is agriculture, trade, manufacturing, transportation, financial services, all have also experienced a very sharp decline,” he explained.
“So Covid-19 has had a tremendous impact from the social side, where poverty has also resulted in layoffs.”
(dru)
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