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Jokowi banks on investment to drive economy in Q3
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President Joko "Jokowi" Widodo delivers a speech in this undated file photo. (The Jakarta Post/Seto Wardhana)
P
resident Joko “Jokowi” Widodo plans to boost foreign investment to support the virus-battered economy in the third quarter as the government’s stimulus spending remains slow and household spending weak.
Jokowi has instructed Coordinating Maritime Affairs and Investment Minister Luhut Pandjaitan to bolster investment in the third quarter this year, saying this, aside from boosting household spending, would be the key to economic growth.
“That could be the only key [to support the economy], as boosting exports is hard […] while domestic consumption is stuck,” Jokowi said on Monday during a Cabinet meeting. “There must be other things we can do, [including] boosting investment in the third quarter to revive the economy.”
Investment Coordinating Board (BKPM) chief Bahlil Lahadalia had projected Rp 213 trillion (US$14.43 billion) in investment in the third quarter this year, Jokowi went on to say. “If we cannot post positive investment growth, we should at least try, so that it will not contract by more than 5 percent.”
Indonesia’s economy shrank by 5.32 percent year-on-year (yoy) in the second quarter due to large-scale social restrictions imposed to curb the virus spread, taking a toll on household spending, investment and government expenditure, among others.
Household spending, which makes up more than 50 percent of the GDP, fell 5.51 percent yoy in the second quarter, while investment fell 8.61 percent.
Coordinating Economic Minister Airlangga Hartarto said the government had spent around 25 percent of the Rp 695.2 trillion stimulus package to support the economy and strengthen the healthcare response to the pandemic.
