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Jakarta Post

Stimulating consumption

  • Editorial board


Jakarta   /   Wed, February 24 2021   /  01:00 am
People queue to receive government social cash transfers (BST) at an office complex in Cibinong, Bogor regency, on July 20. The Social Affairs Ministry is working with post offices to channel the financial assistance to underprivileged residents from May until July. Each recipient will receive Rp 600,000 (US$42) per month. JP/P.J. Leo(JP/P.J. Leo)

The year 2020 was indeed an extraordinarily hard one. Official data confirm that the economy contracted 2.07 percent, the poverty rate increased from 9.2 percent to slightly over 10 percent and the number of unemployed Indonesians increased from around 7 million to 12 million. The government has been implementing the correct policy synergy to address the recession caused by the pandemic-induced twin crises of health and economy since last March, tripling the 2020 fiscal deficit to 6 percent of gross domestic product (GDP). The social assistance budget allocation was doubled this year to Rp 410 trillion (US$28 billion), or 15 percent of the total state budget to support laid-off workers and poor families. Generous tax incentives were provided to micro, small and medium enterprises, the most labor-intensive industry sector. Bank Indonesia (BI) further eased its money policy last w...