Govt sets aside Rp160 tln budget stimulus to tackle COVID-19 fallout

The second stimulus, excluding import duties, reaches Rp22.9 trillion, plus the widening budget deficit of 0.8 percent, or equal to Rp125 trillion and the first package of Rp10.2 trillion.

Jakarta (ANTARA) - The Indonesian government has apportioned Rp160 trillion in budget funding to mitigate the impact of coronavirus (COVID-19), Coordinating Minister for Economic Affairs Airlangga Hartarto stated.

"The stimulus package totals Rp160 trillion," he stated while announcing the second round of stimulus package at a press conference, here, on Friday.

Hartarto explained that the allocations encompass the widening budget deficit of up to Rp125 trillion, or 0.8 percent of the national gross domestic product (GDP).

In addition, the total budget comprises Rp10.3 trillion for the first round of the stimulus package and Rp22.9 trillion for the second round of the stimulus package.

"The second stimulus, excluding import duties, reaches Rp22.9 trillion, plus the widening budget deficit of 0.8 percent, or equal to Rp125 trillion, and the first package of Rp10.2 trillion," he stated.

Finance Minister Sri Mulyani Indrawati remarked that the widening budget deficit of 0.8 percent from the targeted 1.76 percent in the state budget is aimed at boosting the budget's performance.

The budget hike is crucial for maintaining the people's purchasing power and mitigating the impact of the spread of COVID-19 on the national economy, she stated.

"We do not put a brake on the budget, but state revenues decline. This is by-design as we allow the deficit to widen. We make assurance that the state budget will support the economy," she noted.

She highlighted the government’s continued monitoring of the latest economic condition in view of the dynamic global developments.

Hence, the second round of stimulus package is aimed at curbing risks and minimizing the impact of the current situation on the business world, corporations, and the public, she noted.

"For its part, the second round of the stimulus package will focus on the production sector disrupted due to (a global COVID-19) pandemic that has made it difficult for manufacturing industries to find capital goods and raw materials," she stated.

The government had earlier announced the second round of policy package in which it will bear income tax worth Rp8.6 trillion for processing industries in six months' time.

In addition, it deferred Article 25 of the Income Tax Law as much as 30 percent for 19 processing industries during the April-September 2020 period.

Source: ANTARA News

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