Page 15 - Indonesia Taxation Quarterly Report (Q2-2020)

Survey of Recent Developments

The government then revised the 2020 State Budget In the same period, from April to
then revised the posture through Presidential Reg. the end of June 2020, the level of
2020 State Budget (Peraturan Presiden/Perpres) Number Indonesia’s foreign exchange reserves
posture through 54 of 2020, which was later revised by was seen as stable and also relatively
Presidential Reg. Presidential Reg. Number 72 of 2020 high, amounting to USD 127.60 billion,
(Peraturan Presiden/ as a form of countercyclical policy to USD 130.5 billion, and USD 131.7
Perpres) Number tackle the impact of the pandemic. 5 billion. As of the end of second quarter
54 of 2020, which this year, Indonesia’s foreign exchange
was later revised by reserve was equivalent to 8.1
Presidential Reg. No. Looking at the whole economic
72 of 2020 as a form context, Indonesia’s GDP in the first months of imports and payments of
of countercyclical quarter still recorded positive growth government debt. This value is above
policy to tackle despite a significant slowdown as the international adequacy standard of
the impact of the of 2.97% which then followed by the around 3 months of imports.
pandemic. negative growth of -5.32% in the second
quarter. In fact, these situations give Yet, in terms of exchange rate, the
the total growth in the first semester movements of rupiah against the US
into -1.26% (yoy). dollar was suppressed until early April
to May 2020 due to the strengthening
Within the first two quarters, the most trend in the Dollar Index and financial
affected sectors include the tourism market shocks. Per 13 May 2020,
sector which involves hospitality, it made the position of IDR 14,887.
aviation, restaurants, and so forth. A However, the exchange rate of the
demand decrease in these sectors rupiah against the US dollar then
then has encouraged business players showed a strengthening trend, which
to take responsive measures, i.e. was set in the position of IDR 14,733
reducing activities, employees, and at the end of May and IDR 14,302 as of
terminating production activities. 30 June 2020.
Therefore, the government responded
this situation by issuing some policies In terms of state revenues and grants,
through fiscal stimulus in order to the realization reached 47.72% of the
support health care, public protection, State Budget target set in Presidential
and directly affected sectors by the Reg. Number 72 of 2020 by the end
Covid-19 outbreak. Besides, this policy of second quarter. Thus, the annual
is also intended to strengthen the growth for April to June 2020 was
financial stability. 3.23%, -9.02%, and -9.83% compared
to same period last year. These
These realizations The other economic indicator, inflation realizations then respectively made
then respectively level based on consumer level was state deficit in April, May, and June
made state deficit in recorded at 0.08%, 0.07%, and 0.18% 2020 stood at 0.44%, 1.10%, and 1.57%
April, May, and June (mtm) from April to June 2020. The low of GDP compared to the target of of
2020 stood at 0.44%, inflation in April 2020 was contributed the Revised State Budget (Anggaran
1.10%, and 1.57% of by the controlled food prices due to Penerimaan dan Belanja Negara-
GDP compared to adequate supply and reduced public Perubahan/APBNP) as mentioned in
the target of of the demand in social activity which led to a Presidential Reg. Number 72 of 2020.
Revised State Budget reduction in household consumption.
as mentioned in On the other hand, inflation value in The central government expenditure in
Presidential Reg. No.
72 of 2020. May 2020 was mainly affected by April, May, and June 2020 amounted
deflation in chili commodities due to to IDR 382.53 trillion, IDR 537.33
harvest time, oversupply of broiler trillion, and IDR 668.53 trillion or
eggs despite its low demand, and also grew by 3.37%, 1.23%, and 5.99%
increased supply of imported garlic. (yoy) respectively. On the other hand,
Conversely, inflation in April to June transfers to Regions and Village Funds
2020 was recorded at 0.84%, 0.90%, within said period amounted to IDR
and 1.09% (ytd) and 2.67%, 2.19%, and 241.45 trillion and IDR 306.60 trillion.
1.96% (yoy).

5 This information is obtained from the Work Meeting of the Ministry of Finance and Budget
Committee of the House of the Representatives entitled “Realisasi Semester 1 2020 dan Outlook
APBN 2020” (July 2020).

3