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Indonesia announces $742m stimulus to shield economy from virus
The government will also add Rp 1.5 trillion to housing loan and down payment subsidies for low-income Indonesians.
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President Joko Widodo gives a speech at the cabinet plenary session at Bogor Palace, Tuesday, Feb. 11, 2020. ( Setneg/Handout)
T
he government has announced a Rp 10.3 trillion (US$742 million) stimulus package that is expected to boost consumer spending and reinvigorate Indonesia’s tourism industry, which has been deflated by the deadly coronavirus outbreak.
Finance Minister Sri Mulyani said on Tuesday that the government would disburse Rp 4.6 trillion to the 15.2 million beneficiaries of its staple needs program. The government will also add Rp 1.5 trillion to housing loan and down payment subsidies for low-income Indonesians.
“This is the 30 percent bottom segment. They will use the funds immediately for consumption,” Sri Mulyani said at the State Palace.
The government will also grant Rp 3.3 trillion to regional authorities to compensate for tax revenue losses from tax exemptions that are also part of the stimulus.
“We will support ten tourist destinations [...] by not collecting hotel and restaurant taxes over [the next] six months,” said Sri Mulyani.
The 10 destinations will include Yogyakarta; Malang, East Java; Manado, North Sulawesi; Bali; Mandalika, West Nusa Tenggara; Labuan Bajo, East Nusa Tenggara; Bangka Belitung province; Batam and Bintan of the Riau Islands; and all regencies in North Sumatra’s Lake Toba.
President Joko “Jokowi” Widodo, who has championed tourism as a new source of economic growth for Indonesia, faces a four-year low economic growth rate of 5.02 percent in 2019. The novel coronavirus may drag down growth by up to 0.6 percentage points.
