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JAKARTA, KOMPAS.com – Several countries have now entered the brink of recession, as a result of the Covid-19 pandemic.
Meanwhile, Indonesia is currently preparing for this threat if in the third quarter of 2020 economic growth is still at a negative level.
PT Indo Premier Sekuritas head of marketing Paramita Sari said the main marker of a recession is economic downturn with reduced business and industrial activity.
Also read: Facing the recession, portfolio diversification in solutions
This condition has the potential to turn economic growth negative in two consecutive quarters.
Looking at the second quarter of 2020, Indonesia’s economic growth was minus 5.32 percent.
“However, this optimism remains for the Indonesian economy, which can still grow positively until the end of the year, if in the third quarter the economic growth remains in the positive zone,” said Paramita. Kompas.com, Thursday (03/9/2020).
Despite the looming recession, there are several ways you can support the government’s efforts to safeguard the economy in the future.
Also Read: Can Indonesia Experience a Recession in 2020?
Here are 4 tips you can follow to prepare for the threat of a recession.
Thrifty doesn’t mean being stingy. Saving money in the midst of the Covid-19 pandemic, which is not yet sure when it will end, is very important to face economic conditions that may be even more difficult than the current ones.
So some nonessential finance positions really need to be put off first and focus on basic needs.
It is also important to meet basic needs independently, for example, you can cook yourself for daily food needs.
In this way, food orders through an online application should also be reduced little by little so as not to spend money. The key to saving is controlling desires and prioritizing needs, ”explained Paramita.
Nobody knows what the future holds. There are many unforeseen events in the future that no one can safely see and avoid, such as illnesses, accidents, layoffs, deaths, floods, and other sudden events.
Also read: See 7 reasons why you should have an emergency fund
Given the economic uncertainty due to the slowness of national economic movements, the preparation of an emergency fund is very important.
This emergency fund, which must be liquid, is important to anticipate these unexpected expenses.
“The ideal formula for an emergency fund is the amount of monthly expenses multiplied by the number of months anticipated, which is usually a minimum of 6 months,” he explained.
3. Purchase of local products and SMEs
One of the steps to support economic growth in times of recession is to buy local products and MSMEs.
This sector is very basic because it has reached the lowest level of the economy and will have a direct impact on society.
Also read: Discipline tips to save emergency funds
Thus, although large-scale commercial and industrial activity has slowed, there is still movement in the economy at a lower level.
The purchase of local products and UMKM indirectly supports the sustainability of people’s lives, therefore it has the potential to grow the national economy.
A true investor is always ready with all the possibilities that will happen. Recessionary conditions that cause anxiety for investors, but which, on the other hand, can provide great opportunities for investors to profit.
One investment that remains attractive in the face of the recession is investing in the capital market, starting with mutual funds and stocks.
Diversification of investments in the capital market can be started with lower risk money market mutual funds and fixed income mutual funds.
When it comes to stocks, it is certainly important that investors pay more attention to stocks. bluechip.
For reference, investors can look at the IDXQ30 index that was released by IDX in early August, where the index components are 30 stocks that have historically been relatively high in returns, good creditworthiness, and stable earnings growth with liquidity in transactions and good financial performance. well.
