YAKARTA (Reuters) – Indonesia is investing 11.5 trillion rupees ($793 million) in the public budget of some regional progressive banks and lending to provincial governments for economic recovery amid the pandemic, the finance minister said Monday.
Minister Sri Mulyani Indrawati said the program followed the 30 trillion rupees allocated to state lenders with needs and targets.
The budget will be invested in regional progression banks in the capital, Jakarta, and the provinces of West Java, Central Java, East Java and North Sulawesi. The government is also considering making an investment budget in regionally progressive banks in Bali and Yogyakarta provinces.
Indrawati also announced in an online briefing a 15 trillion rupee loan program for the provincial governments of Jakarta and West Java, the country’s main economic and commercial centres, to encourage economic activity.
The budget was raised through the central bank, which bought government bonds, which will allow provincial governments to set interest prices for the structure of roads, markets and fitness infrastructure, Indrawati said.
“The purpose is to restart projects that have been postponed due to the reorientation of (budget) efforts and economic expansion, respecting COVID-19 adequacy protocols,” Indrawati said.
Indonesia’s economy is expected to contract or, at best, grow slightly this year, according to the Ministry of Finance, as the pandemic reduces economic activity.
(Report through Tabita Diela; Edited through Fransiska Nangoy and Ed Davies)
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