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Said Explains 6 Challenges After Indonesia Comes Out of Recession

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Jakarta, – Chairman of the Indonesian House of Representatives’ Budget Agency (Banggar) Said Abdullah explained the six challenges ahead following Indonesia’s economic growth rate in the second quarter of 2021, which grew to 7.07 percent compared to the second quarter of 2020.

First, the policy for the Implementation of Restrictions on Community Activities (PPKM), which was implemented from July 3 to August 9, 2021, brought consequences of an economic slowdown in the third quarter of 2021 and even triggered a contraction of 1.7-2 percent.

“This needs to be the government’s attention,” Said said in Jakarta Friday (6/8).

Second, so that the level of economic contraction in the third quarter of 2021 is not too deep, the government must be disciplined in achieving the Covid-19 reduction target with its PPKM policy.

Read: Said Hopes The Target for Reducing COVID-19 Cases Can Be Achieved

“With the success of controlling Covid-19 and PPKM not being extended, I estimate that in the fourth quarter of 2021, economic growth can return to the positive zone in the range of 4.7-5.2 percent,” the PDI-P politician commented.

Third, Said continued, as the rate of positive cases of Covid-19 in villages increases, plus BPS data which shows the agricultural sector, especially food crops, has contracted 8.16 percent, the government must anticipate that it will not have a serious impact on national food security.

This is because if the positive cases of Covid-19 in the village increase, amid the growth of contracted food crops, it will have a double impact, namely access to health services in the village is not as much as in the city, which results in a higher fatality rate due to Covid-19 and disruption of food supply. national.

Fourth, as a result of the impact of PPKM, the government must make social assistance programs more effective, especially for poor families.

“This step is to anticipate the possibility of another contraction in the level of household consumption. To support upper-middle households, the government needs to encourage tax incentive policies that allow them to spend even more, so that household consumption levels are well maintained in the positive zone in the next quarter, Said Said.

Fifth, said Said, along with the increasing pace of exports and imports, which in the second quarter of 2021 exports grew 31.78 percent and imports grew 31.22 percent, the government needs to anticipate various import-export activities that support GDP.

For example, in cases of scarcity of containers, the Customs Excise Information System and Automation (CEISA) service at the Directorate General of Customs and Excise is no longer problematic, including various extortion activities that were discovered by President Joko Widodo.

Read: Said Asks the Government to Increase National Food Security

Sixth, the member of Commission XI of the Indonesian House of Representatives continued, the government needs to anticipate the tapering off (monetary tightening) policy which is planned to be carried out by the Fed in October 2021, if the United States (US) economy shows improvement.

The US economic recovery has also encouraged the possibility of capital outflows on the national financial market, which in consequence will depress the rupiah.

However, the opportunity for national export potential will increase, because the US is Indonesia’s traditional export market. Total exports to the US in 2021 are 12 percent of total exports.

“Once again, I ask the government to maintain the momentum of our economic growth throughout 2021 in order to be able to survive in the range of 3.3-3.8 percent by considering all the challenges that we will face in the next two quarters,” concluded the legislator for the East Java XI electoral district. .

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