Essay Impact of Covid

IMPACT OF COVID-19 ON THE INDONESIAN ECONOMY
By: Jery Irawan (L1A022050)
Coronavirus disease 2019 or better known as COVID-19 is currently a big

conversation all over the world. This virus began to be published to the world at the end of
2019 as an infectious disease originating from the city of Wuhan, China. This virus has
infected more than 20 million people worldwide. In Indonesia itself, the Covid-19 is starting
to spread since the beginning of 2020, and there have been more than 6.41 million
Indonesians infected by COVID-19 to date, a very fantastic number for the category of the
number of patients.1 As a result of this prolonged phenomenon, which has a negative impact
not only on the health sector but also has a significant negative impact, especially in the
economic sector.
During the COVID-19 pandemic, the economy in Indonesia experienced a instability

that hampered the country's economic growth, and inflation during the pandemic is projected
to be 3 percent, due to tight food supplies and the depreciation of the rupiah against the
dollar.2 Inflation attacking various fields in the country's economy, such as tourism and
export commodity revenues, is expected to decline, resulting in the current account deficit
occupying 2.9 percent of gross domestic product (GDP) in 2020. The government issued a
notice on March 18 2020 to reduce all indoor and outdoor activities in all sectors related to
tourism, and the creative economy to curb the spread of the coronavirus. This has caused the
paralysis of the tourism industry, and increased unemployment, because tourism is a place for
job opportunities for people around tourist areas and outsiders. Not only the tourism sector
has experienced temporary paralysis, but employees of other types of companies have also
felt the impact of the Covid-19 pandemic. Worker activities that usually take place outside
the home have to be carried out directly at home, many employees are threatened with
termination of employment (PHK) due to the large number of jobs that cannot be done from
home, as well as production activities that rely on machines at the production site. This
cessation also occurred due to a lack of purchases from consumers and limited exports to
certain countries, due to limited exports, the company's income decreased, and the company
even suffered heavy losses.3
The impact of covid-19 is not only in the field of tourism and companies but also has
a negative impact on the aviation industry, because airlines have reduced flight schedules
since the pandemic, which has led to forced layoffs at several airlines. On the manufacturing
side, retail sales fell 15.6% to 219,361 units between January and March 2020, according to
Gaikindo,259,963 compared to a year earlier. This significant decline had a negative impact
on Indonesia's GDP. On the other hand, the automotive industry is known to also contribute
to GDP by 29.3%, as said Minister of Industry Airlangga Hartarto on Monday during the
2019 Indonesia Industry Summit (IIS) at ICE BSD, Banten Tangerang. MSMEs are also an
industry that makes a major contribution to employment among other industries. SMEs
1
https://covid19.go.id/, ‘Data Sebaran Covid-19’, Https://Covid19.Go.Id/ <https://covid19.go.id/>.
2
Muhammad Imam Junaidi Muh. Hamzah, Musthafa Syukur, Muhammad Nur Salam, ‘Dampak Pandemi Covid-
19 Terhadap Perekonomian Indonesia: Analisis Terhadap Sektor Domestik Dan Stabilitas Inflasi’, TRILOGI:
Jurnal Ilmu Teknologi, Kesehatan, Humaniora, 382–388 (2021).
3
Muh. Hamzah, Musthafa Syukur, Muhammad Nur Salam.
themselves face the same problem. Some MSMEs have no income at all, and some MSMEs
are forced to lay off their employees due to the ongoing pandemic.4
This impact automatically affects the decline in people's purchasing power where the
circulation of money will be very minimal in the community and at the same time the
production of goods will be limited and cause a trade deficit. The economic impact of Covid-
19 has brought business to a standstill for nearly 24 million people in East Asia and the
Pacific. The World Bank also estimates that nearly 35 million people will remain in poverty.
In fact, the World Bank estimates that the number of people living in extreme poverty
globally will increase to 922 million (World Bank, 2020). If proper prevention strategies are
not put in place to deal with the epidemic, Indonesia's economic growth will be depressed, as
predicted by the Indonesian finance minister. Economic growth will be depressed to 2.5%-
0%.5
The COVID-19 pandemic also has implications for the market system, not only actual
economic fundamentals. Obstruction of this market system can eliminate economic access
that affects supply and demand. The collapse of the Indonesian economy, not in its economic
fundamentals. Important aspects of the economy include supply, demand and supply chains.
If all three are disturbed, there will also be an economic crisis in various levels of Indonesian
society. The group that is most vulnerable to the economic consequences of the pandemic is
the population whose income comes from daily income.6
The market system was disrupted due to covid erasing the impact of economic access,
but the impact of COVID-19 also had a positive impact on the Indonesian economy by
opening up new export market opportunities outside China. The positive impact of the
epidemic is an opportunity for Indonesia to strengthen its domestic economy. The reason is
that the outbreak has made the government only focus and strengthen domestic purchasing
power. With this, the government can make good use of it and investment can remain stable
even though global growth is currently under threat. This makes Indonesia try to take
advantage of its natural resources and domestic purchasing power because the process of
going in and out of goods from Indonesian seas is reduced and even detained to suppress the
spread of COVID-19.
4
Ali Syah Putra, ‘Dampak Pandemi Covid-19 Terhadap Perekonomian Indonesia’, Third Conference on Research
and Community Services STKIP PGRI Jombang Berinovasi Di Masa Pandemi, 2021.
5
Ririn Noviyanti Putri Fakhrul Rozi Yamali, ‘Dampak Covid-19 Terhadap Ekonomi Indonesia’, Ekonomis: Journal
of Economics and Business, 384–388 (2020).
6
Fakhrul Rozi Yamali.
BIBLIOGRAPHY
Ali Syah Putra, ‘Dampak Pandemi Covid-19 Terhadap Perekonomian Indonesia’, Third
Conference on Research and Community Services STKIP PGRI Jombang Berinovasi Di
Masa Pandemi, 2021
Fakhrul Rozi Yamali, Ririn Noviyanti Putri, ‘Dampak Covid-19 Terhadap Ekonomi
Indonesia’, Ekonomis: Journal of Economics and Business, 384–388 (2020)
https://covid19.go.id/, ‘Data Sebaran Covid-19’, Https://Covid19.Go.Id/

<https://covid19.go.id/>
Muh. Hamzah, Musthafa Syukur, Muhammad Nur Salam, Muhammad Imam Junaidi,
‘Dampak Pandemi Covid-19 Terhadap Perekonomian Indonesia: Analisis Terhadap
Sektor Domestik Dan Stabilitas Inflasi’, TRILOGI: Jurnal Ilmu Teknologi, Kesehatan,
Humaniora, 382–388 (2021)

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IMPACT OF COVID-19 ON THE INDONESIAN ECONOMY

By: Jery Irawan (L1A022050)

Coronavirus disease 2019 or better known as COVID-19 is currently a big

During the COVID-19 pandemic, the economy in Indonesia experienced a instability

https://covid19.go.id/, ‘Data Sebaran Covid-19’, Https://Covid19.Go.Id/

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