MACROECONOMIC ANALYSIS SERIES: Indonesia Economic Outlook, Q2-2020

The case of Covid-19 pandemic in Indonesia has increased dramatically, reaching more than 2,400 recorded cases with an increasingly widespread distribution. The presence of this pandemic certainly poses a major risk, both to the society and the Indonesian economy. The economic slowdown in both real and financial sectors is inevitable. Amid the risk of significant disruption in domestic economic activity, the government requires strategic, massive and welltargeted fiscal policies to be executed swiftly. So far, the stimulus has been issued by the government aiming at two focuses. For the short-term focus, the government has increased the healthcare budget and accelerated the realization of the social assistance program. Compared to other affected countries, the amount of the health sector budget in Indonesia is relatively higher, around 0.5% of GDP. For the long-term focus, the government has prepared a strategy to recover economic activity through several initiatives, such as tax incentives and credit relaxation. So far, the total amount of fiscal stimulus packages has amounted to 2.5% of GDP.

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