JAKARTA (The Jakarta Post/ANN): The government’s big-check fiscal stimulus to bolster purchasing power and tourism- and trade-related industries amid the coronavirus (Covid-19) outbreak will reduce state revenue and raise debt levels, economists say. They have called for productive spending to support the economy.
Center of Reform on Economics Indonesia research director Piter Abdullah said the planned stimulus packages would “no doubt” increase debt levels and widen the budget deficit, and he called on the government to manage the budget efficiently while providing the much-needed stimulus.
The measure follows the unveiling of a Rp10.3 trillion stimulus package last week to support consumer spending and tourism. A large portion of this year’s social spending will be disbursed in the first quarter of this year. The programmes include the Family Hope Programme , School Operational Assistance for elementary and high schools and the noncash food programme, as well as village funds for rural development.
“Adding more debt is the only way to counter the negative coronavirus effects amid pressure on revenue performance, ” Piter added. Rookmaaker said that any deterioration in fiscal metrics as a result of the novel coronavirus would likely be short-lived.
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