Intercafe IPB University Discusses the Effectiveness of Monetary Policy in the COVID-19 Pandemic Period in Indonesia

At least there are five things needed in handling COVID-19 in Indonesia. First, ensure the health protocol is run properly. Second, how about the absorption of our country's spending together? Then oversee the opening of economic sectors with the health protocol. Credit restructuring, and digital economic development.

This was conveyed by Aida S Budiman, PhD, assistant Governor of the Bank Indonesia Economic and Monetary Policy Department in the Effectiveness of Monetary Policy Webinar for the COVID-19 Pandemic Period in Indonesia held by the International Center for Applied Finance and Economics (Intercafe) Institute for Research and Community Empowerment (LPPM) ) IPB University, (20/7). "We expect global economic contraction to continue, longer than previously estimated. Economic activity is still restrained with low consumer confidence. This has an impact on other external indicators. The volume of world trade is declining, including Indonesian export commodities all experiencing negative, except for some things such as Crude Palm Oil (CPO), coffee and some metal goods prices that are not as deep as decreasing in 2019, "said Aida.

The same thing happens in the global market, continued Aida, a variety of high frequency data is used big data to see the development of COVID-19 in Indonesia. These results indicate a very sharp decline due to Large Scale Social Restrictions (PSBB) due to the prohibition of citizen mobility."As the mobility index in various cities looks trough which continues to fall from February to April. Only then began to rise slowly. In various other indicators also showed the deepest trough in the second quarter but now it has started to move upward, such as job vacancies, consumption, customer transactions and others, "he said.
Responding to this, Prof. Dr. Hermanto Siregar, Professor of Economics at IPB University explained, it was too early to judge if May 2020 was the bottom or minimum point. Because the positive case curve, both daily and cumulative still uphill. While even a single wave has not been seen. According to him, economic indicators that began to increase, could be down again. "I'm afraid this minimum is still a local minimum. Because the COVID-19 itself from the drawing is still rising, both cumulative and daily curves. Econometrics say it's still non-stationary. If it's still like that, then we conclude that something is spurious, dangerous. We'll wait for him until we are stationary, then we conclude. There is a possibility of going down again like in America, "explained Prof. Hermanto.

Learning from other countries, which are said to be successful countries overcoming COVID-19, said Prof. Hermanto are those who are able to limit or stop direct and indirect impacts rather than pandemics. Demonstrated by the country's ability to avoid trade-offs between COVID-19 and socio-economic impacts. "Vietnam was successful because of its commitment to ensuring that there were no transmissions between regions and countries, it was really lockdown. Then Germany, enabling its extraordinary environment both for medical and economic. While South Korea learns from MERS, "he said.
As a result of COVID-19 on the economy, Prof. Hermanto concluded that economic stimulus is important. This can maintain or increase household consumption in rural and urban areas which are declining due to COVID-19. Economic stimulus is also needed for the recovery of the export-oriented real sector. "Food security must also be maintained. The economic stimulus can be by providing free superior seeds and subsidized fertilizers, animal feed assistance and fishery facilities, "he said.

The central and regional governments, said Prof. Hermanto, need to ensure the logistics distribution of raw materials and output of the real sector runs smoothly. The use of APBN / APBD needs to be translated to support agriculture in a broad sense. In the new normal era, the government also needs to ensure the effectiveness of implementation.
"The business world is adjusting business processes in line with health protocols. For the community, in addition to complying with various recommendations and rules imposed by the government, it is also while developing micro or household business opportunities that are possible to run, "said Prof. Hermanto. (IAAS / NAS)


Published Date : 22-Jul-2020

Resource Person : Prof Dr Hermanto Siregar

Keyword : COVID-19, Economic Stimulus, Intercafe IPB, IPB lecturer