Direct Cash Assistance For Positive Impacted Fuels In PDB

President Joko Widodo distributed social assistance at the Jailolo Post Office, West Halmahera Regency, North Maluku Province (Photo: BPMI Setpres/Laily Rachev)

JAKARTA - Researcher for Macroeconomics and International Trade from the National Research and Innovation Agency (BRIN) Iwan Hermawan said social assistance (bansos) was able to maintain national economic stability amid rising fuel prices (BBM).

In the Rapa Media activity entitled Impact of the increase in fuel prices on the Economic Sector in Indonesia by BRIN which was monitored in Jakarta, Monday, October 3, he said the social assistance would have an impact on the growth of Gross Domestic Product (GDP) by 0.0067 percent.

"The increase in fuel and social assistance prices still has a positive impact on GDP," said Iwan Hermawan, quoted.

He said the social assistance would minimize the various contractions that occurred in the national economy caused by the increase in fuel prices.

Iwan Hermawan said that social assistance will keep people's purchasing power reductions at 0.18 percent and rising inflation at 1.17 percent.

He continued that social assistance will also maintain a decline in export value at 0.30 percent and a decrease in import value at 0.64 percent.

Meanwhile, he said the adjustment in fuel prices would actually improve the performance of the technology and gas (oil and gas) industry. In addition, it will improve the performance of the machinery and equipment sector by 3.2 percent, the natural gas and geothermal sector by 0.36 percent, and mining by 0.28 percent.

However, according to him, the fuel price adjustment will reduce the performance of the processing and transportation industry, such as the performance of the electronics and equipment sectors which will decrease by 0.62 percent, air transportation services by 0.65 percent, and land transportation services by 0.17 percent.

The government is distributing social assistance of IDR 24.17 trillion to maintain people's purchasing power in the midst of fuel price adjustments, consisting of Direct Cash Assistance (BLT) of IDR 12.4 trillion, Wage Subsidy Assistance (BSU) of 9.6 trillion and transportation subsidies of IDR 2.17 trillion.