Ari Kuncoro: Stimulus of Consumption and Demand, Key to the Recovery of the Manufacturing Sector
Nino Eka Putra ~ PR of FEB UI
DEPOK – (4/8/2020) Based on data from the Purchasing Managers Index (PMI) Indonesia HIS Markit July 2020, it is shown that the manufacturing sector has improved, from 39.1 to 46.9. “This indicates that the manufacturing sector is expanding. In addition, commodity prices have decreased or are relatively low,” as concluded from the dialogue between Aline Wiratmaja, as the host and Professor Ari Kuncoro, Rector of Universitas Indonesia as the resource person in the Closing Bell “Be Cautious as Indonesia Slipped into the Abyss of Recession” on CNBC Indonesia, Tuesday (4 / 8/2020).
The manufacturing industry that has improved and is needed according to the pandemic conditions is the textile industry, which is related to health support needs, such as personal protective equipment, masks, face shields, and hospital equipment. In addition, cycling is a trend among the community, which increases the purchasing power or demand for cycling equipment. Meanwhile, demand in the manufacturing sector for durable goods is still on a downward curve, such as electronics, mobile phones and motor vehicles.
According to Ari, the role of government spending will encourage further optimism for manufacturing expansion. If government spending can be boosted and large-scale social limitation (PSBB) continues to relax, it is estimated that the manufacturing index will exceed 50 in August 2020. So, what is needed is an increase in public demand for goods / services, while Indonesia’s exports are still limited due to the world’s recession.
“Encouraging the consumption stimulus and public demand is the key to the revival of the manufacturing sector. Basically, currently the government has given various kinds of relaxation, it’s just that people’s absorption and purchasing power is still low, so the expansion of the manufacturing sector is also low” Ari concluded at the end of his dialogue session. (hjtp)
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