JAKARTA (Reuters) -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 ($1.5 billion), the finance minister said on Monday.
State-owned companies will cover around 850 billion rupiah in costs for policies like subsidising highway toll fares, while the rest will come from the government’s coffers, Sri Mulyani Indrawati said.
“With these economic stimuli … we hope economic growth in the second quarter can be kept close to 5%, compared to our previous forecast of a slowdown due to global conditions,” the minister said.
Southeast Asia’s largest economy grew 4.87% on a yearly basis in the first quarter, its weakest pace in over three years and hit by falling household spending. The forecast for the rest of the year is also clouded by a troubling global trade outlook.
Much of the package launched on Monday 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% because the budgeting process would take too long.
($1 = 16,240 rupiah)
(Reporting by Gayatri Suroyo and Stefanno Sulaiman; Editing by John Mair)
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