JAKARTA, June 2 — Indonesia's economic policy package aimed at stimulating demand, which includes fare subsidies as well as cash and food handouts over June and July, will cost the government 24.44 trillion rupiah or US$1.5 billion (RM6.38 bln), said Finance Minister Sri Mulyani Indrawati.
State-owned companies will cover around 850 billion rupiah (RM222.4 million) in costs for policies like subsidising highway toll fares, while the rest will come from the government's coffers.
"With these economic stimuli ... we hope economic growth in the second quarter can be kept close to five per cent, compared to our previous forecast of a slowdown due to global conditions," she said today.
Southeast Asia's largest economy grew 4.87 per cent on a yearly basis in the first quarter, its weakest pace in over three years and was hit by falling household spending. A troubling global trade outlook also clouds the forecast for the rest of the year.
Much of the package launched today was in line with the economic policies announced on May 24.
However, Sri Mulyani said the government had decided to cancel a plan to cut some electricity tariffs by as much as 50 per cent, because the budgeting process would take too long.
— Reuters
