US stimulus to have positive impact on Indonesia's economy: BI

US stimulus to have positive impact on Indonesia's economy: BI

Bank Indonesia logo. ANTARA / HO - BI documentation.

Jakarta (ANTARA) - The US$1.9-million US fiscal stimulus, taking effect since March 17, 2021, would have a positive impact on Indonesia’s economy, Macro Economy Group Head at Bank Indonesia’s Macroeconomic Policy Department, Riza Tyas Utama, stated.

Utama noted that the additional US fiscal stimulus support of up to US$2 trillion is expected in the fourth quarter of 2021 if it is approved by Congress.

"This is actually an opportunity for Indonesia to capitalize on," Utama remarked at an online Economic Journalist Training in Jakarta on Thursday.

Utama expounded that the stimulus will unquestionably have an impact on the US economy first after experiencing a deeper contraction over the past year as compared to Indonesia.

The $1.9-trillion rescue plan includes various programs to support households and employees.

The stimulus will immediately strengthen the consumption capacity of households and employees.

"The big stimulus will certainly be very effective, especially the US$1.9 trillion, because it is offered within six months," Utama remarked.

She pointed out that economic recovery had begun in the US in line with an increase in consumption. This will have a positive impact on Indonesian exports as the US would be unable to meet its own needs, so it will import.

"When the US economy improves, there will certainly be import requirements," Utama stated.

According to Utama, Indonesia should be able to meet import requirements in the US that is already experiencing a recovery, especially from the manufacturing side.

"We take advantage of this, both in terms of the volume and from the side of prices," she noted.

Utama believes that if Indonesian producers and exporters are able to capitalize on this momentum, then it will have a multiplier effect on the domestic economy.

"From the export side, it is one of the drivers of the domestic economy apart from domestic economic sources driven by various fiscal stimulus," she stated.
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