The government allocated Rp 770 trillion from the state budget and Rp 505 trillion from regional administration budgets for spending in the fourth quarter, with actual disbursement depending on how quickly ministries and regional administrations spend, Finance Minister Sri Mulyani Indrawati said on Thursday.

“We are hoping that the momentum of economic recovery can be maintained in the fourth quarter with these funds,” she told the House of Representatives Commission XI on financial affairs.

“As we have seen in the third quarter, government spending is crucial to revive and reverse the [direction of the] economy.”

Government expenditure jumped 9.76 percent in the third quarter to recoup from a second quarter contraction of 6.9 percent, driven by higher social and capital spending in efforts to fight the impacts of the pandemic as the economy entered into recession. At the same time, household spending, investment and exports and imports contracted.

Indonesia plunged into recession for the first time since the 1998 Asian financial crisis as the economy shrank 3.49 percent in the third quarter, after recording a 5.32 percent contraction in the second quarter. The economy is expected to contract by 0.6 percent to 1.7 percent this year, according to the government’s estimate.

The government has spent 55 percent of the Rp 695.2 trillion stimulus earmarked to revive an economy reeling from the pandemic, Sri Mulyani said, with the biggest spending on social protection programs and aid for micro, small and medium enterprises.

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