Economist: PSBB is implemented, Indonesia can survive the recession

JAKARTA, KOMPAS.com – DKI Jakarta Governor Anies Baswedan decided to tighten the enforcement of the Large-Scale Social Restrictions (PSBB) policy. This step was taken to reduce the number of PSBB transmission in the DKI Jakarta area, which has increased sharply in the last few days.

Institute for Development of Refrom on Economics (Indef) economist Bhima Yudhistira said Anies’s move to pull the “ emergency brake ” lever was necessary to reduce risks. recession occurs continuously until the year 2021.

Because he said, the economy did not show any improvement when the local government decided to loosen the PSBB in mid-August.

Also read: Indonesia is on the Verge of Recession, How Do We Respond?

“The experiment with the easing of the PSBB turned out to be even worse for the economy, the longer recoveryif you loose it. Better short-term corrected economy, then it can rebound at the end of the year and survive from recession in 2021, “Bhima said when contacted Kompas.com, Friday (11/9/2020).

However, making this decision has a big risk.

According to Bhima, the tightening of the PSBB has increased the risk of negative economic growth in the third quarter of this year.

In addition, the negative economic performance will also continue into the fourth quarter.

“The effect of the PSBB is of course quite extensive to all aspects of the economy, starting from the decline in household consumption, industrial production and the realization of investment as well. It is estimated that mass layoffs will occur in anticipation of falling demand,” said Bhima.

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For that, according to him, both the central and regional governments must be able to meet basic needs at the community level poor and vulnerable to poverty.

So, they can survive even though the PSBB is re-implemented.

Bhima said the central government could reallocate the budget for handling Covid-19 and PEN to meet needs social assistance which increased at the time of PSBB tightening.

“The field of tourism promotion and infrastructure has been reallocated to cash assistance. Then the stimulus which is still low realization such as the umkm interest subsidy can also be shifted,” he said.

Also read: 3rd Stage Economy Minister Jokowi Touches Anies about PSBB Jakarta

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