Former Trade Minister Gita Wirjawan: People's Purchasing Power Will Be Encouraged If Vaccines Are Available

Former Minister of Trade (Mendag) Gita Wirjawan. (Photo: Instagram @gwirjawan)

JAKARTA - Former Trade Minister (Mendag) Gita Wirjawan said economic recovery, especially to boost people's purchasing power, depends on the availability and capacity of COVID-19 vaccination.

"With this approach we can vaccinate 300 thousand per day, we can vaccinate 100 million humans in 2021 and beyond, but there are still limitations to the availability of vaccines," said Gita Wirjawan in the Mandiri Webinar Series quoted from Antara, Wednesday, December 2.

With this limitation, continued Gita Wirjawan, it is related to efforts to restore people's purchasing power in the midst of the COVID-19 pandemic which is estimated to continue in 2021.

The purchasing power or household consumption, said the former Trade Minister, plays an important role in Indonesia's economic structure with a portion reaching the range of 55-60 percent.

Gita Wirjawan, who is also a businessman, added that in the last few months the Indonesian economy had shown improvement. However, he again assessed that the economic recovery could expand depending on the speed of vaccination.

"In the last month there has been a significant improvement but will it lead to a widespread recovery? I actually see this is very limited by how quickly we vaccinate," added Gita Wirjawan.

On the other hand, he continued, the pandemic also affected foreign trade, one of which was the decline in imports, considering that around 70 percent of domestic production was supplied by imports.

"It will greatly impact our capacity to trade with each other," said Gita Wirjawan.

The government has disbursed the 2020 National Economic Recovery Program (PEN) amounting to Rp.695.2 trillion with the largest allocation, one of which is for social protection, reaching Rp. 234 trillion. It is hoped that the allocation of social protection will boost the purchasing power of the community, especially the middle to lower income earners.

Even so, the pandemic has caused people's purchasing power to weaken, one indicator of which is the slowing of credit realization, which only grew 0.12 percent as of September 2020.

Meanwhile, he said, the public prefers to save their funds in banks as indicated by increasing the third party funds (DPK) of banks to reach 12.88 percent.