Indonesian Government Policy in Mitigating Economic Risks due to the Impact of the Covid-19 Outbreak

Abstract

Covid-19 pandemic have a negative impact on economies globally, including in Indonesia. The disease is advancing at great speed since the first Indonesian patient was referred to the hospital due to confirmed covid-19 (26 February 2020) until on 15 June 2019 there have been 50,187 patients infected. Several government policies have been implemented by regarding the economic sector as a main concern to prevent the breaking of the Indonesian economic chain. To anticipate, March 31, 2020 Indonesian President signed Government Regulation No. 21 of 2020, which regulates the implementation of PSBB (Large-Scale Social Restrictions), yet economic growth in the first quarter of 2020 showed a declining performance at 2.97 percent on 17 April 2020. Bank Indonesia views the level of the Rupiah exchange rate as fundamentally "undervalued". The objective of this paper is, therefore, to overview the negative impact of the covid-19 outbreak on the Indonesian economy and the policies implemented by the government to mitigate the economic risks. Moreover this article is a normative economic analysis on the basis of secondary data, this study found that Indonesia is facing up an economic domino effect of covid-19 and  Bank of Indonesia (BI) has taken several steps by strengthens policy coordination with the government and other authorities to stabilize the rupiah exchange rate and mitigate the impact of Covid-19 risk on the domestic economy.