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27 Feb 2020
Indonesia: Coronavirus fears prompt new incentive programs – UOB
Haris Handy and Economist Enrico Tanuwidjaja at UOB Group reviewed the recently announced incentive programs in Indonesia.
Key Quotes
“Indonesia’s government has announced fiscal incentives to support growth momentum as confirmed after the Cabinet meeting in Tuesday Feb 25th, 2020. The Incentives are aimed at supporting the tourism, airline, and housing sectors which were directly hit by the outbreak of the coronavirus (COVID-19) that started in China; and to encourage domestic consumption while reducing the pressure from external headwinds. The total amount of the fiscal incentives will amount to IDR10.3tn (USD742mn). From the stimulus on tourism, the government expects to attract more foreign visitors and raise IDR13tn in forex exchange earnings; while stimulus in housing is expected to generate 175K demand of new house. In our view, these incentives will complement the benchmark rate cut last week by the central bank.”