Easing (PPKM policy) does not directly restore the economy. It means that the government spending support is still required at least until the end of 2022Jakarta (ANTARA) - Government spending is still required until 2022-end despite Community Activity Restrictions (PPKM) in Jakarta, Bogor, Depok, Tangerang and Bekasi (Jabodetabek) and other 15 districts and cities having dropped to level 3, economist Bhima Yudhistira stated.
"Easing (PPKM policy) does not directly restore the economy. It means that the government spending support is still required at least until the end of 2022," Yudhistira from the Center of Economic and Law Studies (Celios) noted in a statement received here on Tuesday.
Easing the PPKM, from level 4 to 3, will improve household consumption, but to a limited extent. Consumption is not expected to strengthen as in the second quarter of 2021 before the PPKM policy is tightened.
Although people are allowed entry into shopping centers, the purchasing power of the middle class has not supported the high spending. In addition, work capacity in offices is still limited to 25 percent of the normal capacity for non-essential sectors.
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"This means some workers are still at home. In fact, people making purchases in shopping centers are generally workers, who work in offices. Hence, although one sector is relaxed, the other sectors are still limited. Thus, the easing has not had much effect," Yudhistira remarked.
The economist advised the government to continue to increase the distribution of spending for social protection and assistance to Micro, Small and Medium Enterprises (MSMEs). In addition, he advised the government to continue to prioritize vaccination for workers in essential sectors.
"Do not allow the manufacturing industry sector to be accused of causing a spike in COVID-19 cases, as there are transmissions in factory clusters. Health protocols must continue to be applied strictly. Meanwhile, entrepreneurs should also be transparent when new cases are discovered in their work environment, so that treatment can be pursued more quickly," he remarked.
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Yudhistira estimates that economic growth in the third quarter of 2021 will not reach seven percent, despite a positive trend being projected. He estimates economic growth in the third quarter of 2021 to reach around two percent as compared to the same period in the previous year.
"In September, there were no major events that could trigger an increase in community mobility," he pointed out.
Economic growth throughout the year will also be affected by the handling of the COVID-19 pandemic in the fourth quarter of 2021. If COVID-19 cases have declined and economic activity returns to normal, then the economy can grow, driven by spending for Christmas and New Year.
Meanwhile, the economist estimates exports to be lower since the destination country is focusing on dealing with delta variant. This possibility will affect the rate of consumption and demand for industrial raw materials.
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Translator: Sanya Dinda Susanti, Katriana
Editor: Fardah Assegaf
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