Indonesian Government Plans Changes in Economic Policy to Withstand Global Risks
Trade tension between the US and China continues to damage economies of other countries. US-China trade conflict could hurt other economies not only through trade, but also financial channels as these could heighten investors' risk aversion.
It is reported, that Indonesia will announce economic policy changes in coming months to help its industries cope with rising global uncertainty and the indirect impact of trade tensions between world’s two largest economies. Bank Indonesia (BI) is trying to stabilize the fragile rupiah.
Airlangga Hartarto (Indonesia’s Industry Minister) said the government is preparing measures to improve the investment climate. According to an official statement on Monday, Hartarto said the government will "optimize the use of fiscal tools in the form of import and export taxes, as well as harmonizing import taxes, so that industries would have their competitive edge and are able to export."
Indonesian government aims to give more incentives to exports, including by subsidizing timber legality verification for small and medium furniture makers. Meanwhile, Indonesian authorities are also preparing policies aimed at reducing the current account deficit.