VOI - Voice of Indonesia | RRI - Radio Republik Indonesia

Finance Minister Sri Mulyani Indrawati said that the increase in the realization of government spending, which continues to accelerate until the end of 2020, will be a momentum to improve economic performance.

"The government has used up the budget. Which has seen a 14 percent increase in government spending in August 2020, including the acceleration of economic recovery spending," Sri Mulyani said at a press conference on the state budget development in Jakarta, on Tuesday.

Sri Mulyani said that the government spending will support economic growth in the short term, even though the third quarter of 2020 is estimated to be negative or the same as the previous quarter.

"Government spending increases, and the economy is moving positively, showing a significant improvement. This realization will continue to accelerate and is expected to sustain growth in the third quarter," she said.

However, Sri Mulyani acknowledged that consumption from the government side could not support overall economic growth, because consumption, investment, and exports have not fully recovered.

"Our economic activity is improving and needs to be maintained by implementing health protocols. Fiscal instruments will continue to support health policies as well as economic recovery and protect communities," Sri Mulyani said.

She also revised Indonesia's economic growth projection for 2020 from minus 1.1 percent to 0.2 percent to minus 1.7 percent to minus 0.6 percent.

The only component of expenditure that can still contribute positively to the Indonesian economy by the end of 2020 is government consumption, which is estimated to grow 0.6 percent to 4.8 percent.

Meanwhile, household consumption at the end of 2020 is estimated to grow negatively by minus 2.1 percent-minus 1 percent, PMTB will contract by minus 5.6 percent-minus 4.4 percent, and exports will grow negatively by minus 9 percent-minus 5.5 percent.

With this estimate, Indonesia is certain to experience a recession or negative growth, as experienced by other large and developing countries due to being affected by COVID-19. (Antaranews)