COVID-19 hit heavily
Just one day after our previous report was released, Indonesian President Joko Widodo announced the first two cases of coronavirus in Jakarta. The first two cases were part of a cluster in a dancing club where a foreigner had recently been. Apparently, the foreigner was infected by the COVID-19 virus and hospitalized in Malaysia, and the case was reported in the news. From this news, the person who became the first case, who was already hospitalized, reported this to the doctor and was immediately transferred to the special hospital handling this virus. From this gathering, five more cases were discovered, and those people were immediately hospitalized. In the first week after that discovery, things were relatively quiet, with only one additional case from the crew of the Diamond Princess Cruise. During the second week, however, coronavirus cases in Indonesia rose. The number continued to increase, and the latest tally is 1,414 cases as of March 30. One of the prominent figures who has suffered the virus attack is the Indonesian Minister of Transportation.
The government responded to these extraordinary circumstances by encouraging physical distancing, implemented with many variations by local governments. At the same time the government quickly converted the former Asian Games athletic dormitories into a new hospital that can accommodate more than 3,000 patients. This activity appears to be continuing with the remaining six towers. The government also prepared a policy to provide social assistance, especially with cash transfers and other means, largely to the lowest income people, to adjust for the drop in their income.
In the midst of this situation, the Indonesian trade balance for February 2020 registered a large surplus. Exports in February reached $13,937.5 million, up 2.24% month over month and 11% year over year. Meanwhile, imports reached $11,601.6 million, a decline of 18.69% month over month and 5.11% year over year. Therefore, the trade balance for the month of February stood at a surplus of $2,335.9 million, a significant reversal from the previous month, which saw a deficit of $636.7 million. With the surplus in February, the total trade balance for the first two months of 2020 stands at a surplus of $1,699.2 million.
The Central Board of Statistics also released the inflation report, which showed inflation of 0.28% for February 2020. With that performance, year-over-year inflation stood at 2.98%, at the lower end of the target corridor of the Central Bank. In light of the extraordinary circumstances from the COVID-19 attack, and in response to the drastic Federal Funds rate cuts, the Central Bank decided to slash its benchmark interest rate by 25 basis points to 4.50% at its Monetary Policy Meeting in March 2020.
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