Gov’t Takes Necessary Measures to Avoid Recession in Q3: Finance Minister
Date 24 Agustus 2020
The Government is taking all necessary measures to restore the economy, especially in the third quarter of 2020 which is the key to avoiding recession, Minister of Finance Sri Mulyani Indrawati has said.
“The strategy for accelerating spending in the third quarter is the key to reducing economic contraction or even to avoid a technical recession, namely two negative quarters in a row, even though in the second quarter the contraction in consumption and investment was relatively challenging to recover,” the Minister said in Jakarta, Monday (24/8).
Sri also said that the Government is implementing three strategies, namely accelerating the implementation of the national economic recovery (PEN) program, increasing Government spending, and strengthening household consumption.
Regarding the PEN program that already exists and is listed in the budget implementation list (DIPA), the budget absorption will be accelerated and the accuracy will continue to be improved at the next stage of distribution. The Government will also complete regulations on new PEN programs.
Sri went on to say that economic activity is showing a positive trend but is still limited and is fraught with uncertainty, and Government spending must be accelerated as a trigger for economic growth. The acceleration of Government spending will boost consumption and investment which in turn will stimulate positive economic growth in the third quarter.
The Government, she added, continues to work hand in hand with the National Public Procurement Agency (LKPP) for the procurement of goods and services to provide relaxation and flexibility while still upholding the accountability.
In a bid to strengthen household consumption, the Government will speed up social assistance spending and implement several measures, including increasing the assistance, adding the frequency, extending the assistance period and adding the index of social assistance programs.
“For household consumption, social assistance is expected to increase the purchasing power, especially for the lowest 45%. However, we hope that the middle class can also start to recover their consumption, which really depends on confidence in the COVID-19 handling,” the Minister said. (Ministry of Finance/EN)
Translated by: Ridwan Ibadurrohman
Reviewed by: Mia Medyana