Economist: Semester II stimulus can maintain public purchasing power
Jakarta (ANTARA) - The Chief Economist of Trimegnah Sekuritas Indonesia, Fakhrul Fulvian, believes that the Rp26.34 trillion economic stimulus package launched by the government is a constructive step in maintaining public purchasing power amidst global economic uncertainty.
The composition of the stimulus, which focuses on food assistance, transport incentives, as well as internship and vocational programmes, demonstrates that the government understands the importance of maintaining household consumption and strengthening the labour market.
“This package shows that the government is paying attention to the condition of Indonesian households. In a situation of high global uncertainty, maintaining public purchasing power is vital because household consumption remains the backbone of Indonesia’s economic growth,” Fakhrul said in Jakarta on Tuesday.
He noted that food assistance for vulnerable groups will have a direct impact on the consumption of low-income communities, while internship and vocational programmes can assist those affected by the slowdown in economic activity and changes in the labour market structure.
Nevertheless, fiscal stimulus is essentially an instrument to maintain economic momentum in the short term and cannot be the sole source of national economic growth.
“Stimulus can help maintain growth over the next few quarters, but ultimately, stimulus only buys time. Sustainable economic growth still requires investment, the creation of productive jobs, and an increase in national productivity,” he explained.
According to Fakhrul, the effectiveness of the stimulus will be greater if accompanied by efforts to strengthen macroeconomic stability and increase the confidence of business actors and investors in the direction of national economic policy.
“The Indonesian economy currently needs a combination of protecting public purchasing power and strengthening market confidence. Households need consumption support, while the business world needs certainty to resume expansion and investment,” he said.
Furthermore, Fakhrul suggested that the government should use the stimulus as a bridge towards a broader economic reform agenda, particularly in strengthening the quality of growth and improving the expectations of economic actors.
“Moving forward, the government needs to continue efforts towards gradual fiscal normalisation, provide clarity on the direction of medium-term economic policy, strengthen fiscal and monetary coordination, and ensure that various national strategic programmes have credible and sustainable designs. These steps will help restore investor confidence, strengthen the rupiah exchange rate, and encourage greater investment,” he said.
Fakhrul added that amidst the still dynamic global challenges, Indonesia’s ability to maintain economic stability will be just as important as its ability to drive growth.
“Strong economic growth is not only born from stimulus, but also from confidence. When households feel confident to spend, companies feel confident to invest, and investors believe in the policy direction, then higher and more sustainable growth will be created,” he concluded.