The government uses counter-cyclical fiscal policies during economic downturns, including increasing spending on health, social protection, and business support programs. To restore employment, the government provides social assistance funds and job training. The government also aims to maintain food inflation between 3-5% by strengthening supply availability and distribution. This involves coordinating between central and local governments as well as maintaining rice reserves. Foreign trade imbalances that result in higher imports than exports can cause currency depreciation.
The government uses counter-cyclical fiscal policies during economic downturns, including increasing spending on health, social protection, and business support programs. To restore employment, the government provides social assistance funds and job training. The government also aims to maintain food inflation between 3-5% by strengthening supply availability and distribution. This involves coordinating between central and local governments as well as maintaining rice reserves. Foreign trade imbalances that result in higher imports than exports can cause currency depreciation.
The government uses counter-cyclical fiscal policies during economic downturns, including increasing spending on health, social protection, and business support programs. To restore employment, the government provides social assistance funds and job training. The government also aims to maintain food inflation between 3-5% by strengthening supply availability and distribution. This involves coordinating between central and local governments as well as maintaining rice reserves. Foreign trade imbalances that result in higher imports than exports can cause currency depreciation.
1. - The government uses a counter-cyclical fiscal policy.
Counter-cyclical policy refers
to a policy where in a recession, the government intervenes through fiscal stimulus with a focus on health, social protection, support for the business world which is integrated in the national economic recovery program (PEN). Counter-cyclical policy aims to encourage aggregate demand and economic activity that absorbs labor in order to improve economic conditions. In a crisis situation, the government must intervene primarily for health spending. The government cannot delay until it has sufficient state revenues. Important and priority expenditures related to health facilities, investment in health human resources including support for households and businesses must be executed as soon as possible during this pandemic. Delaying these purchases will only result in greater costs in the future. In the short term, public debt can stimulate the aggregate demand needed during a crisis that drives economic growth. It is hoped that further economic growth can increase taxes which increase the solvency of the government. - To restore employment stability, the Government provides social assistance funds to the community. The hope is that this assistance can increase people's purchasing power so they don't fall into the economy and provide various trainings for business actors or UMKM, so that they can innovate and support to add selling value to the products they sell. 2. - Maintain volatile food inflation in the range of 3.0% - 5.0%. Efforts are made to strengthen the four strategic pillars which include Price Affordability, Supply Availability, Smooth Distribution, and Effective Communication (4K) during the Covid pandemic -19, including maintaining supply availability and smooth distribution ahead of National Religious Holidays (HBKN). Strategy implementation is focused on maintaining continuous supply over time and smooth distribution between regions, among others through the use of information technology and strengthening interregional cooperation.; - Strengthening the coordination of the Central and Regional Governments in controlling inflation through holding the 2021 Inflation Control National Coordination Meeting (Rakornas) with the theme “Encouraging the Increasing Role of Food MSMEs through Optimizing Digitalization to Support Economic Recovery and Food Price Stability"; - Strengthening the synergy between Ministries/Agencies with the support of the Regional Government in order to make the TPIP 2021 work program a success; - Strengthening national food security by increasing production, among others through the food estate program, as well as maintaining smooth distribution through optimization of infrastructure and efforts to handle the impact of natural disasters; and - Maintain the availability of Government Rice Reserves in the context of the Supply Availability and Price Stabilization program to support the implementation of the Implementation of Community Activity Restrictions. 3. The deficit situation where the value of imports exceeds the value of exports is one of the causes of depreciation. Foreign trade is carried out by paying the domestic currency of the selling party, so that if we export more than we import, our currency will appreciate.