IDR 450.1 Trillion Stimulus Is Not Enough To Overcome The Impact Of COVID-19?

JAKARTA - The Fiscal Policy Agency (BKF) of the Ministry of Finance predicts that the stimulus package budget issued by the government, totaling IDR 405.1 trillion, will not be sufficient to deal with the coronavirus or COVID-19 pandemic and its social and economic impacts.

The Head of BKF Febrio Nathan Kacaribu said that the current COVID-19 pandemic is completely uncertain, so the government finds it difficult to measure the scale of the negative impact it causes. However, the government will continue to study the impact along with fiscal policies that need to be done to minimize the bad effects.

"Is this stimulus package enough? We don't know, we even suspect it won't be enough," he said, in a virtual discussion entitled 'Indonesia Macro Economic Update 2020', Jakarta, Monday, April 20.

Febrio said the government would also prepare if the Rp405.1 trillion stimulus was not enough to reduce the negative impact of the COVID-19 outbreak. The government, he continued, would make further policies to anticipate the lack of such stimulus.

"So how can the Rp150 trillion (third stage stimulus) be as effective as possible to ease the burden there," he said.

Based on data from the Ministry of Finance, until April 2020, the government has issued at least three policy packages. First, a stimulus policy of IDR 8.5 trillion for tourism which was later canceled, except for the stimulus for cheap housing quotas on property and additional social assistance.

Then, the second package, a stimulus of IDR 22.5 trillion for the manufacturing industry, ranging from tax relief, ease of export-import, and exemption of import duty. Finally, the government issued a third stimulus worth IDR 150 trillion from the total additional budget of IDR 405.1 trillion disbursed for the prevention of COVID-19.

Indonesia's stimulus is smaller than other countries

Chief Economist of Bank Central Asia (BCA) David Sumual said that the stimulus budgeted by the Indonesian government in handling COVID-19 was relatively small compared to other countries.

"So, based on the data we collect, the stimulus for handling COVID-19 in Indonesia, which amounts to Rp. 405.1 trillion, only has a share of 2.6 percent of the Gross Domestic Product (GDP)," he said.

David said that his party appreciated what the government had done. Where the government has been very fast in dealing with the crisis and has made Perppu No.1 / 2020 concerning State Financial Policy and Financial System Stability within one month.

"Now we just need to accelerate implementation, especially to prevent this demand shock from having a bad impact on the real sector and society as a whole," he said.

The following is the amount of stimulus from other countries that David collected from various platforms:

1. Japan 20 percent of GDP

2. Malaysia 17 percent of GDP

3. Australia 16.4 percent of GDP

4. Singapore 12 percent of GDP

5. United States 11 percent of GDP

6. Thailand 9 percent of GDP

7. Canada 8.4 percent of GDP

8. Germany 4.9 percent of GDP

9. Brazil 3.5 percent of GDP

10. Saudi Arabia 2.7 percent of GDP

11. Indonesia 2.6 percent of GDP

12. France 2 percent of GDP

13. Turkey 1.5 percent of GDP

14. China 1.2 percent of GDP