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Indonesia pumps IDR10.3 trillion to boost consumer spending

The Indonesia government is reportedly handing out 10.3 trillion rupiah (SG$1 billion) to aid businesses and consumers to counter the economic impact due to the COVID-19 outbreak. According to several media outlets, during a cabinet meeting, ministers announced that a numbers of measures that will be undertaken by the government.

Indonesia’s finance minister Sri Mulyani Indrawati said to the media present at the cabinet meeting that 4.56 trillion rupiah of the overall sum will be handed to approximately 15.2 million of the lower income households which is the bottom 20-30% of the population. Through this distribution, each household will receive 50,000 rupiah more each month in non-cash food aid, bringing the total to 200,000 rupiah. This will be a six-month initiative, beginning in March 2020. According to Indrawati, the disbursement aims to bolster consumer spending and create multiplier effects on the economy.

A Reuters news article reported that Indonesia’s economy faced its lowest growth in three years. In the same article, Indrawati said China is Indonesia’s top trade partner and one of its source of investment and tourism. As such, the COVID-19 outbreak in China could potentially slow the growth to 4.7%, which falls below the Indonesian government’s goal of 5.3%.

Meanwhile, recently, Indonesian president Jokowi Widodo reportedly said the government is in talks to provide discounts to foreign tourists visiting Indonesian tourist destinations. While this has not been confirmed, Jokowi said that the discounts will come as part of a stimulus package, as country’s tourism sector is impacted by the COVID-19 outbreak over the past few months.

According to The Jakarta Globe, Jokowi addressed this at a meeting held at the Presidential Palace, saying that the government is in talks to offer 30% off the tariffs.  In addition, specific tourist destinations that will hand out 30% discounts will also be named along with the decision.

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