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Jakarta, CNBC Indonesia – Finance Minister Sri Mulyani Indrawati assessed that Large Scale Social Restrictions (PSBB) are one of the health protocols that must be carried out to reduce the spread of Covid-19. However, on the other hand, PSBB has a negative impact on the economy.
According to him, PSBB had an impact on the economic contraction not only in Indonesia but in almost every country in the world.
“PSBB or even in several countries have carried out a total closure or confinement that has had a very serious impact on the socioeconomic conditions of the community,” he said when welcoming the new ITB students mentioned on Friday (09 / 11/2020).
He continued, in Indonesia the PSBB started in early March for the economy to contract immediately. In the second quarter of 2020, the economy contracted minus 5.32%.
“Indonesia carried out the PSBB, especially at the beginning of the Covid, specifically in March, April and May, so we will see a significant direct socioeconomic impact. Our economy in the second quarter experienced a deep contraction,” he said.
This deep contraction occurred because when the PSBB was implemented, all economic activities stopped. In fact, there were massive layoffs in several companies due to the absence of productive activities.
“This negative growth illustrates economic activity in terms of demand, if consumption, investment, exports and even government activities have decreased and in terms of production, be it agriculture, trade, manufacturing, transportation, financial services, all have also experienced a very steep decline. ” He explained.
“So Covid-19 has had a tremendous impact from the social side, where poverty has also resulted in layoffs.”
[Gambas:Video CNBC]
(dru)
