Indonesia will issue a government regulation in lieu of law (Perppu) that will boost state spending by up to Rp 405.1 trillion (US$24.6 billion) as the budget deficit is anticipated to widen to 5.07 percent of GDP in the nation’s fight against COVID-19.

President Joko “Jokowi” Widodo said Tuesday the Perppu would serve as a foundation for the government and banking and financial authorities to carry out “extraordinary measures to ensure the people’s health, safeguard the national economy and financial system stability”.

Of the extra spending, the government will allocate Rp 75 trillion for healthcare spending, Rp 110 trillion for social protection and Rp 70.1 trillion for tax incentives and credit for enterprises. The biggest chunk, Rp 150 trillion, will be set aside for economic recovery programs including credit restructuring and financing for small and medium businesses.

“I have just signed a Perppu on state finance policy and financial system stability,” Jokowi said in a telebriefing. “We will issue the Perppu to anticipate the possibility of a state budget deficit that is estimated to reach 5.07 percent.”

The relaxation of the state budget deficit limit from the current legal limit of 3 percent of gross domestic product (GDP) will apply for three years until 2022. “Afterwards, we will return to imposing fiscal discipline of below 3 percent of GDP starting 2023,” he added.

Indonesia’s fiscal discipline has been lauded, as the country has never exceeded its self-imposed state budget deficit limit of 3 percent of GDP introduced after the 1998 Asian financial crisis. The move to widen the state budget deficit, the first time in history, comes as Indonesia declared a public health emergency that involves imposing large-scale social restrictions as stipulated in the Health Quarantine Law.

COVID-19 cases in Indonesia reached 1,528 on Tuesday with 136 deaths, just a month after the nation declared it had zero cases. (The Jakarta Post)

Trade Minister Agus Suparmanto believes Indonesia is ready to face the humongous challenges posed by the outbreak of the coronavirus (COVID-19) by contributing through global collaboration with G20 countries.

The statement was delivered by the trade minister while participating in the Extraordinary Virtual G20 Ministerial Meeting on the COVID-19 global pandemic held on Monday (Mar 30) night, which was initiated by Saudi Arabia that assumed the G20 Presidency in 2020.

The Trade Ministerial Meeting resulted in an agreement on the significance of G20 to signal strong confidence in the global economy amid the COVID-19 pandemic by maintaining the flow of goods and services, particularly the supply of vital medicines.

"This agreement is a rapid response from the G20 to the global COVID-19 pandemic by ensuring the smooth flow of goods and services through joint efforts to mitigate the impact of COVID-19 on international trade activities," the trade minister noted in a written statement received in Jakarta on Tuesday.

Suparmanto expounded that this agreement was a follow-up to the mandate assigned by the G20 leaders at the Extraordinary Virtual G20 Leaders’ Summit.

Earlier, President Joko Widodo had participated in the Virtual G20 Summit on the COVID-19 crisis on March 26, 2020.

G20 leaders have mandated the trade ministers to ensure the supply of medical equipment and basic agricultural products, maintain global supply chains, and avoid trade disruption.

The trade ministers were also urged to immediately evaluate the impact of the COVID-19 pandemic in the field of trade and create a free, fair, non-discriminatory, predictable, and stable climate of trade and investment and to continue to open markets.

The Government of Indonesia has made ongoing efforts to overcome the impact of the pandemic through fiscal and non-fiscal stimulus packages.

In the trade sector, policy relaxation is conducted to simplify and accelerate import and export activities, get rid of unnecessary trade barriers, and improve national logistics efficiency.

"The main aspect is to ensure a smooth flow of goods and services across borders, especially for vital medical supplies and important agricultural products. The Ministry of Trade, under the coordination of the Coordinating Ministry for the Economy, is committed to launching the next stimulus package to overcome the effects of the COVID-19 pandemic," he stated.

During this discussion, the trade minister conveyed the importance of global cooperation to address the economic impacts of COVID-19, given the interconnectedness and concurrently the current global economic vulnerabilities.

The leadership of the G20 in restoring confidence in the global economy and continuing international trade has become indispensable at this time.

"It must be admitted that the corona outbreak is a global challenge that is increasingly difficult to handle individually. We have no choice left but to collaborate globally," the trade minister stated. (ANTARA)

Indonesian President Joko Widodo (Jokowi) cautioned that several countries that were able to flatten the curve of their confirmed COVID-19 cases are currently challenged by imported cases that had overseas travel records.

China, South Korea, and Singapore are among the countries currently facing what he terms as a novel wave of the new coronavirus disease-related threats, President Jokowi stated during a videoconference meeting held at the Bogor Presidential Palace on Tuesday.

In connection with this problem, the government has reiterated the significance of handling the mobility of Indonesians and foreigners arriving in the country, he remarked during the virtual meeting held to discuss ways to handle Indonesians and foreign nationals arriving from overseas trips.

"Our priority is, now, not just handling the mobility of our people in Indonesia but also tackling the COVID-19 risks posed by those arriving from overseas trips," he noted, adding that COVID-19 cases were found in 202 countries and territories.

Over this past week, the COVID-19 epicenters had also moved, from mainland China to the United States and several European countries.

Hence, the head of state reiterated the significance of strengthening policies on handling the inflows of foreign nationals and Indonesians arriving from overseas travel.

As of Monday (March 30), Indonesia had 1,414 confirmed cases of which 75 were discharged from hospitals, while 122 others died of this deadly virus.

Confirmed COVID-19 cases were found in 30 provinces comprising 698 in Jakarta, 180 in West Java, 128 in Banten, 91 in East Java, 81 in Central Java, 50 in South Sulawesi, 18 in Yogyakarta, 17 in East Kalimantan, 19 in Bali, 13 in North Sumatra, nine in Papua, seven in Central Kalimantan, three in Riau Islands, and eight each in West Sumatra and Lampung.

The coronavirus outbreak that initially struck in the Chinese city of Wuhan at the end of December 2019 infected at least 785,777 people worldwide, while death toll from this virus was recorded at no less than 37,815 as of Tuesday.

According to the Worldometers' website, 165,607 people were reported to have recovered from COVID-19. Related news: Jokowi urges regional heads to tighten entry of Jabodetabek travelers

The Indonesian rupiah strengthened against the US dollar in the Jakarta interbank market on Tuesday morning, as the Chinese economy started to recover.

The rupiah rose 13 points, or 0.08 percent, to trade at Rp16,325 at 9:41 a.m. local time as compared to Rp16,388 earlier.

"Today, the rupiah may receive a positive sentiment from the data of the Chinese government's manufacturing and non-manufacturing indexes for March that exceed the expectation and enter the expansion zone, 52 vs 44.9 and 52.3 vs 42.1," Monex Investindo Futures chief researcher Ariston stated in Jakarta on Tuesday,

The data suggested that the Chinese economy started to recover from the COVID-19 pandemic, he remarked.

China's economic recovery may help the economies of partner countries that require Chinese materials and market, he noted.

The rising US share index may also lend a positive sentiment to the rupiah on Tuesday. The Dow Jones Index rose 3.19 percent on Monday, March 30, 2020.

The spread of the coronavirus outbreak will pose a negative sentiment to impact the rupiah's appreciation, as the main problem remains unsettled, he stated.

He has forecast the rupiah to trade at Rp16,200 to Rp16,400 per US dollar on Tuesday.