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Jakarta Post

Just 34% of Indonesia’s stimulus budget spent six months into pandemic

  • Adrian Wail Akhlas

    The Jakarta Post

Jakarta   /   Tue, September 15, 2020   /   11:10 am
Just 34% of Indonesia’s stimulus budget spent six months into pandemic Coordinating Economic Minister Airlangga Hartarto in Jakarta on Feb. 24. (JP/Wendra Ajistyatama)

The government has only spent around Rp 237 trillion (US$15.92 billion) of the funds earmarked for economic stimulus during the COVID-19 outbreak, representing just 34.1 percent of the allocated budget, six months into the crisis.

Coordinating Economic Affairs Minister Airlangga Hartarto said Monday that the government would expand its aid programs until December and push to expedite spending. The government has allocated Rp 695.2 trillion for stimulus programs, focusing on health care, social safety net programs and economic recovery.

“From the first half of the year until September, budget disbursement has increased significantly,” he told reporters, adding that the government had seen a 30.9 percent month-to-month (mtm) increase in stimulus spending. However, he did not go into details.

The government was currently reviewing a plan to provide aid for honorary workers, he added, explaining that it would extend the cash aid program for workers until March next year and extend the cash aid program for micro, small and medium enterprises (MSMEs) until June next year to bolster domestic consumption.

The government is struggling to revive the economy, which shrank 5.32 percent in the second quarter this year and is widely expected to shrink further in the third quarter. Gross domestic product (GDP) is expected to contract 1.1 percent this year under a worst-case projection.

The Jakarta administration’s reimposition of large-scale social restrictions (PSBB) on Monday is expected to deal a further blow to the economy, with ministers saying assessments would be made on its implications for GDP.

The capital makes the highest contribution to the national economy among all regions of the country, with Jakarta’s regional domestic product accounting for 17.17 percent of the country’s GDP in the second quarter, Statistics Indonesia (BPS) data show. The capital is followed by East Java (14.6 percent) and West Java (13.45 percent), which are both also virus epicenters.