Indonesia to lift social, health spending amid Covid-19 curbs

JAKARTA (REUTERS) – Indonesia will increase spending on social assistance and healthcare in response to a spike in Covid-19 cases and to soften the blow on the economy with tougher restrictions set to take effect this week, its finance minister said on Friday (July 2).

Battling one of the worst coronavirus outbreaks in Asia, the world’s fourth most populous country has seen record infection numbers recently, including on Thursday when it recorded 24,836 cases and 504 deaths from the respiratory disease.

In a bid to contain the wave of cases, “emergency” curbs will take effect from Saturday to July 20 and include tighter restrictions on movement and air travel, a ban on restaurant dining and the closure of non-essential offices.

“There is a potential for the economic outlook to weaken in the third quarter due to the mobility restrictions,” Finance Minister Sri Mulyani Indrawati told a streamed news conference, adding the impact would depend on how long they last.

Southeast Asia’s biggest economy suffered its first recession in more than two decades last year due to the pandemic, but Sri Mulyani said a recovery had been gaining momentum prior to the new virus outbreak.

The economy likely grew for the first time in over a year in the April-June quarter and the government had expected 6.5 per cent growth in the third quarter before the curbs were announced.

The highly transmissible Delta variant that caused a spike in cases in India in April and May is spreading in Indonesia and pushing hospitals across crowded Java to the brink.

In the capital, Jakarta, some emergency wards have been moved to tents set up in hospital car parks, with a surge in Covid-19 patients stretching medical care capacity.

Sri Mulyani said 126.79 trillion rupiah (S$11.7 billion) of social assistance will be provided to help tens of millions of households, in the form of cash transfers, electricity discounts, and by accelerating food aid programmes.

Healthcare spending will also rise 8per cent to 186 trillion rupiah, including to add more vaccination staff and treat Covid-19 patients, she said.

The government has pledged to boost testing and speed up its vaccination drive, which has so far achieved just 7.5 per cent of a target to inoculate 181.5 million people by January.

Up to now, Indonesia has relied mainly on China’s Sinovac vaccine, but authorities have been seeking to tap other sources.

The food and drug agency on Friday authorised for emergency use the Moderna Inc vaccine ahead of the arrival of four million doses via the Covax scheme.

The Netherlands will also donate three million vaccine doses, Indonesian Foreign Minister Retno Marsudi said.

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