If a recession is inevitable, here’s what society can do

KOMPAS.com – The impact of the Covid-19 pandemic on the world economy is obvious to the eye.

This year, several major countries have announced that they are experiencing a recession or negative economic growth for two or more consecutive quarters.

Call it the United States, South Korea, France, Germany, Singapore, Spain, Italy and others.

Indonesia has yet to declare a recession. However, the potential leading to this condition is considered open.

President Joko Widodo has warned that if Indonesia’s economic growth in the third quarter of 2020 remains negative, then Indonesia will enter the brink of recession.

This considering that the growth in the previous quarter was recorded at minus 5.32 percent.

“If we are still in a negative position, it means we are entering a recession,” Jokowi said, on Tuesday (January 8, 2020) as reported. Kompas.com previous.

Also read: Jokowi: if it is still missing, it means that we are entering a recession

End of september

The economist and researcher at the Institute for the Development of the Economy and Finance (INDEF), Bhima Yudistira, said that a recession could occur in the third quarter of 2020 ending in September.

“It is true that a recession will occur when the third quarter of economic growth is negative,” said Bhima, contacted on Wednesday (9/2/2020).

He said several indicators had led to a recession, including bank credit growth, based on Bank of Indonesia money supply data as of July 2020, which was still 1 percent or not seeing a significant increase over the month. previous.

“Even for working capital credit, there was a negative 1.7 percent and consumer credit grew 1.5 percent. The slow growth of bank credit shows a high level of risk on the part of the debtor, for what the banks stop the expansion of the credit “, explained.

Also read: Australia experiences the first recession in almost 30 years

The second indicator is the deflation data for July and August, which shows that people’s purchasing power remains depressed.

Bhima explained that if the recession were to occur, then as a consequence, there would be many people who would lose their jobs and income due to the unilateral termination of employment in the company.

“Automatically, existing funds are not enough to cover daily needs. People need to be more creative to start a business in the digital economy sector,” said Bhima.

Businesses that can survive

Business in the digital realm is seen as a promising field at this difficult time, because many people are meeting their needs through digital platforms.

“This is an economic engine that has good prospects when a phenomenon occurs Work from home and the positive pandemic rate remains high. So people are increasingly dependent on consuming goods and services online, “he said.

“Hopefully new jobs will be created in the manufacturing, commercial, communications and logistics sectors due to the boom in the digital economy,” he added.

Bhima said, from now on, it is necessary to make preparations so that the economic recession does not continue. According to him, all parties can participate.

“Our common task is to prevent the recession from continuing into the fourth quarter of 2020,” he explained.

Also read: Covid-19, economic recession and changes in work culture

What can society do

Quoted from Kompas.com (4/8/2020), financial expert Ahmad Gozali said that the impact of the economic recession, especially on the lower classes, is the rising unemployment rate.

“National production is automatically reduced employment is also reduced. This has led to an increase in the poverty rate,” Gozali said when contacted by Kompas.com, on Tuesday (4/8/2020).

How to survive a recession

To survive a recession, Gozali said there are several things that can be done in general, namely:

• Protect your source of income

As an employee, according to him, it is best not to change jobs aggressively before being certain that the new job is more stable.

“For those who have a business, reconsider the expansion plan,” Gozali said.

He presented that the proposed fund should take care of 3 to 12 monthly withdrawals in liquid form.

“This means that if it is less than that, it can be added by reducing high-risk assets and increasing liquidity,” Gozali said.

• Maintain large expenses, especially credit

If you previously had a car loan or mortgage plan, you need to re-study the risks.

“Is it safe enough to continue with the plan? Don’t be too aggressive, for example, using reserve funds to pay down payments,” Gozali said.

“The thing is, reserve funds are becoming more and more important, don’t use them for other things yet. Even if they can be added,” he added.

• Keep shopping regularly

“Because household consumer spending for important things in Indonesia is actually one of the dominant economic engines,” Gozali said.

Also read: In case of economic recession, this is what society can do