Economy: Total value of the Indonesian state’s assets has reached Rp10,467.53 trillion, according to the  Ministry of Finance. The increased value was recorded after the revaluation of state-owned goods (BMN) for the 2018-2019 period. The revaluation came up with an increase of Rp 4,000 trillion of the assets’ value. The Supreme Audit Agency (BPK) audited the revaluation. The Rp10,467.53 trillion state assets consisted of current assets worth Rp491.86 trillion, long-term investments of Rp3,001.2 trillion, fixed assets of Rp5,949.59 trillion, other assets of Rp967.98 trillion, and long-term receivables valued at Rp 56.88 trillion.

The value of state assets managed by the Ministry of Defense is the highest among ministries and state institutions. Amongst ten ministries manage  the highest asset values, the ministry of defense ranks number one with asset value of Rp1,645.56 trillion, followed by the ministry of public works Rp1,564.61 trillion, State Secretariat Rp575.41 trillion, the ministry of transportation Rp493.90 trillion, the ministry of research and technology Rp399.97 trillion. Then, the Indonesian National Police managed assets worth Rp 295.66 trillion, the ministry of finance Rp114.50 trillion, the ministry of religion Rp94.19 trillion, and the ministry of agriculture Rp84.09 trillion.

Finance: Finance ministry targets the issuance of net Government Securities (SBN) valued at Rp742.7 trillion in the second semester. It will be 63.3% of the target in 2020 of Rp 1,173.1 trillion. The government prioritizes the issuance of SBN in rupiah denomination through regular auctions, private placements, and retail. The policy is intended to encourage the development of domestic SBN market, manage risks of rupiah volatilities, and reduce foreign investor ownership. The government will also optimize private placement, especially from potential institutional investors with limitations in purchasing SBN through auctions.

The issuance of retail SBN will be carried out opportunistically in order to expand the investor base and to control the level of foreign investor ownership. To anticipate the high need for domestic SBN financing, the government will coordinate with Bank Indonesia (BI) through a Joint Decree (SKB) between Finance  Minister and BI Governor. In this regard, BI can buy long-term SBN in primary market. BI will also function as a last resort if the issuance does not reach the target and/or if the SBN yield is too high. To avoid the crowding out effect in domestic market, the government also plans to issue foreign currency SBN.

Industry: Indonesian manufacturing industry was in a deeper contraction phase in the second quarter of 2020, according to Bank Indonesia (BI) data. This is reflected in the BI Prompt Manufacturing Index (PMI) of 28.55%, down from 45.64% in the first quarter, and 52.66% in the second quarter of 2019. PMI contraction in quarter I/-2020 occurred in all components forming BI’s PMI, with the deepest contraction in the production volume in line with declining demand as a result of the Covid-19 pandemic. By sector, all subsectors recorded contractions with the deepest contractions in the Textile, Leather Goods and Footwear sub-sector.

In the third quarter of 2020, the performance of manufacturing is expected to improve although it is still in a contraction phase. BI’s PMI in quarter III/2020 is predicted to reach 45.72%, an increase from 28.55% in the second quarter. All components forming PMI would record improvement. The highest increase is predicted to occur in the index component of total order volume and production volume.

Business: The Covid-19 pandemic affect positively e-commerce business in Indonesia. Bank Indonesia recorded e-commerce transactions jumped to US$ 2.4 billion, an increase of 26 percent (y-o-y) from the second quarter of 2019. As of April 2020, daily transactions increased by 4.8 million compared with the average in the second quarter of 2019. New consumers shop online for the first time during the Large-Scale Social Restrictions (PSBB) recorded an increase of 51 percent.

During the PSBB there was a shift in consumer’s shopping behavior. Previously consumers generally were only trying to buy an item online. Now most of them are actually ‘addicted’ to online shopping. This would be a valuable asset for Indonesia in further developing digital economy. People’s spending behavior on e-retailing and e-groceries increased 69% and digital payment increased 65%. Innovations have also taken place; digital payments are gradually shifting the conventionally face to face direct payment. The increase economic activity in e-commerce was reflected by the year-on-year sales value increase by 7 percent and volume rose by 78 percent.

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