Jakarta, CNBC Indonesia – Minister of Finance Sri Mulyani Indrawati nor the ranks at Ministry of Finance (MoF) has projected that Indonesia’s economic growth in the third quarter of 2020 will be in negative territory. That means Indonesia will enter into the abyss of recession.
Special Staff to the Minister of Finance Yustinus Prastowo, explained that in the third quarter of 2020, the Indonesian economy could grow by minus 2.9% to minus 1%. Even though this figure means Indonesia has fallen into the brink of recession, according to him, this achievement has already passed its lowest point in the second quarter of minus 5.32%.
“Yes, if we see that there is a revision that makes us more realistic and alert. So it is lower than what was decided before, although we see improvements,” he said during a conversation with CNBC Indonesia, quoted on Sunday (9/27/20).
With this projection, Yustinus added that currently there are symptoms to revive the economy.
“This means that the second quarter is already the lowest point and we are headed for a rebound. Whether this will sooner or later depends on how we handle health and how effective government spending is,” he said.
It is said that the government really pays attention to the absorption of government spending. The Ministry of Finance noted that so far there has been a growth in government spending from minus 6.9% in the second quarter of 2020 to a positive 9.8%.
“And household consumption, which is the largest portion of our GDP, grew from minus 5.6% to minus 3%. This means that the social assistance provided is quite effective in maintaining the purchasing power of the lower middle class,” said Yustinus.
“The government wants to ensure that the speed of spending is also encouraged. Until the end of August, 56% of the realization of spending has been realized, even transfers to these regions have reached 73%,” he continued.
Even so, Yustinus admitted that the upper middle class still needed a bigger struggle to formulate policy formulations. He hopes that the stimulus for this group can be effective in the fourth quarter.
“With several new schemes, the stimulus is expected to support this recovery effort so that it will be better, although we must admit that the situation is not easy and we must be extra vigilant,” he said.
He emphasized that the government is very aware that the situation is not easy, the conditions are also tough. He also empathizes with what business actors face. Therefore, the Ministry of Finance continues to foster an optimistic spirit.
“That there are policies or stimuli that have not been effective or have not been on target, it must be admitted. But if we see that recently the speed has been relatively good, the accuracy has also increased. And if we look at the targets for MSME actors it is already quite good, almost 50%. has been absorbed, “said Yustinus.
“For corporations, this is still being pursued. So the task force continues to deliberate on proposals from business actors, we also continue to discuss with business associations in order to find more appropriate and effective stimulus formulations in order to maintain the health of citizens and business people,” he continued.
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