Indonesia Economic Stimulus Package

By: EconomyWatch   Date: 30 June 2010

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Indonesia economic stimulus package has been set at $6.31 billion to cushion existing crisis. In Indonesian currency this amounts to Rp 71.3 trillion, which includes a previous Indonesian economic stimulus package of Rp 27.5 trillion. That particular economic stimulus package for Indonesia was declared by President Susilo Bambang Yudhoyono. This enhanced economic stimulus package of Indonesia is worth Rp 71.3 trillion and includes tax savings of Rp 43 trillion, government spending and subsidies of Rp 15 trillion and waived import duties and taxes amounting to Rp 13.3 trillion.

Economy stimulus package for Indonesia in monetary terms can be broken down into several independent parts. Rp13.3 trillion and Rp 43 trillion have been set aside for waived taxes for consumers and businesses and tax savings respectively in economy stimulus package of Indonesia. In economy stimulus package to Indonesia Rp 10.2 trillion has been allotted for infrastructure spending with Rp 2.8 trillion as diesel subsidy and Rp 1.4 trillion in form of discounted electricity rates for industries. Rp 0.6 trillion has been earmarked for developmental expenses for rural areas.

According to finance minister Sri Mulyani Indrawati, these economic stimulus packages in Indonesia are aimed at strengthening consumers’ purchasing power, increasing spending on labor-intensive infrastructure, and raising sturdiness and competitiveness among businesses. In brief this Indonesian economy stimulus package is targeted at cutting costs borne by business houses and consumers. Consequently, infrastructure spending has been projected to increase by Rp 10.2 trillion, tax incentives raised to Rp 6.5 trillion and subsidizing diesel prices have been increased by Rp 2.8 trillion. Entire amount of economic stimulus package to Indonesia worth Rp 71.3 trillion accounts for 1.4 percent of their gross domestic product (GDP).

These economic stimulus packages in Indonesia have been devised to counter slowing down of investments, weakening of exports and diminished consumption expenditure. Government spending has been increased by 10.4 percent which is expected to achieve an overall growth of 5 percent.



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