Coordinating Minister Luhut admits the Indonesian economy is slowing down: But fate is better than other countries

 Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan acknowledged that Indonesia could not avoid the global economic downturn due to the impact of the Covid-19 pandemic.

“Indonesia’s economy is declining, but it is still doing better than other middle-income countries,” Luhut said at a video conference on Tuesday, August 25, 2020.

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To overcome the impact of Covid-19, Luhut said the government continues to improve tests and health protocols in society. Thus, the rise in health increases and mortality can fall significantly. “We pray that this will have a positive effect on economic development.”

To improve Indonesia’s economy going forward, Luhut said, the government is also focusing on attracting new investment. This is done, among other things, by ratifying the Omnibus Act, downstream industrialization policy and investing in the SME sector. “And we hope this can run well and will encourage more investment to Indonesia,” he said.

Regarding fiscal policy, Luhut said that the government still adheres to the defense principle, and that this principle has been implemented for several years. According to him, there are two important things in the government’s fiscal policy, namely to divert spending from subsidies to capital expenditure, and the Central Bank can also support the economy by buying government bonds.

“We are reducing dependence on fossil energy, one of which is using biodiesel or B30, and crude oil imports have declined. Therefore, we have room to increase the stimulus and temporarily increase the deficit. Bank Indonesia also supports the economy by buying government bonds, says Luhut.

The PEN budget until August 2020 has been used up to IDR 174.79 trillion

BigBussiness – Finance Minister Sri Mulyani Indrawati explained the development of the implementation of the National Economic Recovery Program or PEN at a press conference for the national budget (performance and facts), on Tuesday (25/8/2020) practically.

Until 19 August 2020, the realization had reached 25.1 per cent of the ceiling. This requires accelerated absorption to reduce pressure and maintain economic growth.

“The realization of this Rp 695 trillion (s) Rp 174.79 trillion or 25.1 percent of the ceiling. PEN is based on the latest date August 19 (2020),” said Finance Minister Sri Mulyani.

He previously explained that the total budget distribution for handling Covid-19 and PEN was IDR 695.2 trillion.

There is already a DIPA on Rp. 350 trillion, which is implemented without the need for a DIPA of Rp. 155.96 trillion, and as there is still no DIPA at Rp., 189.23 trillion.

The minister said he would try to speed up the implementation of budgeting by coordinating across ministries. If there are still programs that are not running, they will be reverted.

“We now call for coordination with the coordinating ministers and the ministers to speed up the implementation of the program until December. If there are programs that are not yet running, they will be reworked so that they can be better implemented,” he said.

He detailed the absorption that had been used in the health and social care sector.

“For several elements in the health sector, Rp. 7.36 trillion has been achieved from Rp. 87.55 trillion. For social protection, Rp. 93.18 trillion has been realized from Rp. 203.9 trillion. All social protection programs have been extended to December, even “If there is Some of the cash support was lowered from Rp 600 to 300 000 Rp. The preparatory work has started to run, Village BLT as well,” he explained.

For sectoral and regional government assistance, Rp 12.4 trillion has been achieved from Rp 106.05 trillion, especially for labor-intensive programs, DID, DAK Fisik and Presidential Productive Assistance for micro-enterprises.