Will Economic Recovery Program Prevent Poverty Spike?

Summary

The government is preparing a scenario to rejuvenate the economy post-Covid-19. In a document presented by the Finance Ministry in a meeting with the House of Representatives’ Commission XI, overseeing finance, the National Economic Recovery (PEN) program would start in the second quarter. The ministry planned to begin the program by giving early subsidies and social aids to the poor and borderline poor to maintain people’s purchasing power and consumption as the backbone of the economy.

Other stimuli would also be available for micro, small, medium (UMKM) and ultra micro enterprises (UMi), such as principal payment postponement of UMKM and UMi loans, subsidized interest rates, tax incentives, and credit insurances for UMKM. Besides, the government would focus on industries and state-owned enterprises (SOEs) through tax incentives for industries, bailout funds for state-owned companies, disbursement of SOE’s working capital loans, and capital injection in banks affected by credit restructuring.

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