Panic buying hurts consumption growth in the long run, analysts say

first_imgExperts have warned that the waves of panic buying seen in many supermarkets in Jakarta in recent weeks may contribute to an increase in inflation and hurt the country’s consumption growth in the long run.“The danger of panic buying is that it can create inflation, especially for staple foods,” a senior economist at the Institute for Development of Economics and Finance (INDEF), Aviliani, told The Jakarta Post over the phone on Wednesday.The first wave of panic buyers hit supermarkets at the start of the month, on March 2, after President Joko “Jokowi” Widodo announced the first two cases COVID-19 in Indonesia. Another wave of buyers purchasing in bulk was seen over the weekend as the number of cases in Indonesia grew rapidly. As of Thursday, there were 227 confirmed cases and 19 deaths.The prices of several staple goods have seen a drastic increase. According to the National Strategic Food Prices Information Center (PIHPSN), the average price for a kilogram of granulated sugar across all provinces in Indonesia reached Rp 17,050 (US$1.06) on Thursday, significantly higher than the highest retail price (HET), which is pegged at Rp 12,500 per kilogram.Aviliani urged the central government to work with regional governments to stabilize staple goods because if their prices became volatile, it would not only cause inflation but also “the growth of the economy will slow down”.The Indonesian economy depends, in large part, on household consumption. Household consumption accounted for 56.62 percent of the country’s total gross domestic product (GDP) in 2019, according to the fourth-quarter report on Indonesia’s economic growth by Statistics Indonesia (BPS). The Asian Development Bank (ADB) cited Indonesia’s “strong domestic consumption” as the backbone of the country’s economic growth in 2020, according to the Asian Development Outlook 2019 Update report.“Robust consumption should see Indonesia’s economic expansion continue at a healthy pace this year [2019] and next year [2020],” said ADB country director for Indonesia Winfried Wicklein as quoted in an ADB press release on Sept. 25, 2019.The paradox of panic buying is that it may seem to spur consumption, but, in the long run, it actually does not because people will buy less in the future. “Simply, the more you buy now, the less you will buy later,” an analyst at a major brokerage house told the Post on Thursday.The analyst said that “the impact on economic growth will be marginal if we stretch the time frame over the longer horizon” because consumers would not need more basic necessities than their usual spending patterns.He cautioned about the impact of the novel coronavirus on purchasing power. “If more jobs are lost than created, it will lead to reduced purchasing power and hamper demand,” the analyst explained.Transmart Carrefour vice president of corporate communications Satria Hamid told the Post on Wednesday that the supermarket chain had seen sales increase by 50 percent year-on-year within the last two weeks.“[…] mostly staple foods, followed by hand sanitizer, masks, gloves, hand soap and also goods such as fruits and health supplements,” Satria said, adding that in addition to the stockpiling that occurred on March 2, a significant increase in purchases had been seen over the weekend and had carried into Tuesday of this week.Satria mentioned that Transmart Carrefour was coordinating with the Trade Ministry and the Jakarta administration to ensure a steady supply of goods. Its coordination with the ministry sought to increase access to staple items, including sugar, whose prices have soared.The Indonesian Retailers Association (Aprindo) released a statement on March 2 urging “the Indonesian public not to carry out panic buying due to phobias”.“Panic buying happens when there is a perception formed in society without clear information,” Aviliani told the Post, explaining that the images of empty shelves circling on social media had caused fear in consumers that they would not be able to buy necessary goods when they needed to.  (ydp)Topics :last_img read more

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Thousands leave virus-hit Wuhan as outbound travel ban lifted

first_img“Now that the lockdown has been lifted, I think we’re all pretty happy.”Government estimates have said that as many as 55,000 people are expected to flow out on Wednesday by train from the city, which was placed under an unprecedented quarantine lockdown on January 23.Some could barely contain their happiness.”I’ve been stuck for 77 days! I’ve been stuck for 77 days!” shouted one man from the neighboring province of Hunan, who was in Wuhan when it was sealed off. Long time, no see Chinese media outlets hailed the removal of the travel ban, with headlines posted on their websites after midnight saying: “Wuhan, long time, no see.”Hubei and the provincial capital Wuhan have suffered the majority of China’s officially claimed tally of more than 81,000 overall infections and more than 3,300 deaths.An announcement blaring over the train station PA system said: “Wuhan deserves to be called the city of heroes. Wuhan people deserve to be called heroes.”Despite the measures taken in Hubei, the pathogen spread across China and the world.But Communist Party authorities — who are accused of a slow-footed response and an initial attempt to cover up the outbreak — have claimed recent success in bringing the virus to heel, though questions over the accuracy of its reported case numbers persist.Its official national tally of coronavirus deaths and overall cases has plummeted in recent weeks, with the National Health Commission saying Tuesday that no new deaths had been logged in the preceding 24 hours.That was the first fatality-free day since China began publishing figures in January.Relief over China’s falling virus numbers has been tempered, however, by caution over new risks: rising numbers of infected people arriving from abroad — primarily returning Chinese citizens — and the invisible threat of asymptomatic cases.Hubei residents had been confined to their homes until about two weeks ago, when restrictions began to be eased, triggering a resumption of inbound travel from other parts of China.Authorities, however, had waited until Wednesday to allow normal traffic out of Wuhan amid continued fears in the rest of the country that people from the city pose a risk.Chinese disease-control officials said in January that the virus likely leapt from wildlife to humans at a Wuhan market that sold a wide range of wild animals for food.Wuhan authorities said at the weekend that various restrictions on movement would remain in place to guard against a second wave of infections, arguing that “even greater vigilance is needed” now that the travel ban has been dismantled.People from Wuhan also face hurdles getting out. They must show proof that their area of origin has been declared safe from the virus, and many face the likelihood of two-week quarantines in their destination provinces. The lockdown made Wuhan the first place in the world subjected to draconian containment steps now seen in many countries.It was quickly followed by the rest of surrounding Hubei province, confining tens of millions of people to their homes and cutting the province off from the rest of the world as transport in and out was halted to prevent transmission of the virus. Topics : Thousands of Chinese travellers flocked to catch trains leaving coronavirus-ravaged Wuhan early Wednesday as authorities lifted a more than two-month ban on outbound travel from the city where the global pandemic first emerged.As the ban was lifted on schedule at midnight (1600 GMT Tuesday), many passengers expressed joy and relief as they filed into Wuhan’s Wuchang station, leaping at the chance to board overnight trains heading out of town.”Wuhan has lost a lot in this epidemic, and Wuhan people have paid a big price,” said a 21-year-old man surnamed Yao, who was heading back to his restaurant job in Shanghai.last_img read more

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Bank Indonesia buys US$11.2b in govt bonds to support rupiah, financing needs

first_imgTopics : Bank Indonesia (BI) has bought up to Rp 173.1 trillion (US$11.24 billion) worth of government bonds from primary and secondary markets in a bid to stabilize rupiah and support the government’s financing needs.BI Governor Perry Warjiyo said the central had bought Rp 166.2 trillion worth of government bonds from foreign investors in the secondary market since early this year amid the decline of the rupiah against the US dollar.He said the Rp 2.3 billion worth of  government debt papers were purchased during the government’s regular auction on Tuesday. This is in addition to Rp 1.72 trillion worth of bonds bought by BI in a regular auction on Tuesday last week and Rp 2.93 trillion bought by the central bank in a “greenshoe option” on Wednesday last week. “We see that the government’s financing needs will be fulfilled by the market,” Perry told reporters in a virtual press conference  on Wednesday, adding that bond investors should not bet on Indonesia selling debt at higher yields, as the amount to be raised for the rest of the year will be manageable and the inflow of foreign funds would push yields lower.The government on Tuesday raised Rp 16.62 trillion, below the target of around Rp 20 trillion to Rp 40 trillion, despite total incoming bids of Rp 44.4 trillion as investors bid yields that were too high.”The market will see,  at the beginning they bid for yields that were too high, thinking the sum to be raised would be large,” Perry said, suggesting that investors had bet the government would pay higher yields as it would need a large amount of funds to finance the extra spending for COVID-19 mitigation efforts.The country’s budget deficit is expected to widen to 5.07 percent of GDP this year as the government would have to increase its gross issuance of debt to Rp 1.4 quadrillion this year to finance the COVID-19 mitigation and rescue program,  according to Perry.center_img However, Perry says, the central bank sees only Rp 425 trillion in bond offerings for the rest of 2020 as the government maximizes spending from other sources, including its own cash, as well as loans from development banks, among others.The government plans to provide another Rp 35.3 trillion in new tax incentives for 18 sectors, including those hardest-hit by the COVID-19 pandemic, such as tourism and the food and beverage sector.This is on top of the Rp 436.1 trillion stimulus packages previously announced by the government to strengthen social safety nets, boost healthcare spending and for economic recovery programs.The government raised another Rp 62.62 trillion from government debt papers on Monday and seeks to secure $750 million in loans from development banks, according to Finance Minister Sri Mulyani Indrawati and Finance Ministry data.Previously, Indonesia had raised $4.3 billion in dollar-denominated bonds, including the longest-dated 50-year dollar bond ever issued by an Asian nation, earlier this month. It also sold around Rp 14 trillion in sharia sovereign bonds last week.By early May, BI will have injected a total of Rp 503.8 trillion in additional liquidity to banks and the financial system to help cushion the economic impact of the virus outbreak and to strengthen the rupiah as part of its quantitative easing measures.The rupiah gained against the greenback over the last few weeks, strengthening to Rp 15,394 per dollar as per 11 a.m. on Wednesday from this year’s low of 16,625 per US dollar, according to Bloomberg data.The currency has depreciated as much as 18 percent this year before bouncing back to the current level as the central bank moved to support the rupiah by buying government bonds from foreign investors as they dumped Indonesian assets over fears related to COVID-19.last_img read more

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Rupiah strengthens to below Rp 15,000 per US dollar for first time since mid-March

first_imgThe rupiah has reached its strongest level since mid-March, appreciating nearly 3 percent on Thursday against the United States dollar amid hopes that a vaccine for COVID-19 is developed and central banks’ pledges to hold interest rates to support battered economies.Indonesia’s currency stood at Rp 14,881, appreciating 2.7 percent against the greenback at 4:46 p.m. Jakarta time to emerge from this year’s low of Rp 16,625 amid global recession risks. The rupiah once depreciated by as much as 18 percent this year before appreciating to the current level.Bank Indonesia’s (BI) Jakarta Interbank Spot Dollar Rate (JISDOR) showed the currency strengthening to Rp 15,157 per dollar from Rp 15,415 on Wednesday. On the same day, Fed officials said in a unanimous statement that it “will use its tools and act as appropriate to support the economy” and pledged to keep the interest rate near zero until the US economy returns to normal.Perry said further appreciation of the rupiah would be supported by this year’s lower current account deficit (CAD). The central bank expects the first quarter CAD to be below 1.5 percent and stay below 2 percent throughout the year, down from BI’s earlier projection of 2.5 to 3 percent.Furthermore, a yield differential in government debt papers between Indonesia and other countries was still attractive for foreign investors, Perry said.“This will attract capital inflow into Indonesia,” he added.By early May, BI will have injected a total of Rp 503.8 trillion in additional liquidity into the financial system to help cushion the economic impact of the pandemic and strengthen the rupiah as part of its quantitative easing measures. This includes BI’s bond buying worth Rp 166.2 trillion from foreign investors in the secondary market.The Jakarta Composite Index (JCI) jumped Thursday by 3.26 percent, led by blue chip stocks such as those of state-owned Bank Mandiri, energy company PT Medco Energi and state-owned toll operator PT Jasa Marga. Foreign investors bought around Rp 431 billion (US$28.7 million) worth of stocks more than they sold.As of April 23, however, foreign investors had sold Rp 159.6 trillion worth of Indonesian assets including bonds, stocks and BI certificates, according to Finance Ministry data.The government had successfully raised Rp 221.4 trillion from government bonds by the end of March. This is in addition to a $4.3 billion dollar-denominated bond sales in the US and Rp 11.38 trillion in bond sales at a greenshoe option bond auction on Wednesday, among other debt papers.It would sell Rp 856.8 trillion worth of bonds in the second quarter through to the end of the year to cover its widening budget deficit, Finance Minister Sri Mulyani Indrawati said.The country’s financial markets have started to recover since a slump in March as foreign investors sold Indonesian assets over fears of COVID-19.Topics : “We decided to hold [the interest rate] in the near term to prioritize maintaining the currency level,” BI Governor Perry Warjiyo told the House of Representatives Commission XI overseeing financial affairs on Thursday. “We are confident that the rupiah will further strengthen.”The central bank decided to hold its benchmark interest rate this month at 4.5 percent after a 50 basis points (bps) cut in total in February and March.“The rupiah appreciation is related to the US Federal Reserve’s policy on Wednesday to hold its interest rate at the zero percent to 0.25 percent range,” Bank Permata economist Josua Pardede told The Jakarta Post on Thursday. “In addition, biotechnology company Gilead said the development of its proposed COVID-19 vaccine was running well and that the drug was proven to cure at least 50 percent of the patients [who tested it].”A top US infectious diseases official said Gilead Sciences’ experimental antiviral drug remdesivir would become the standard of care for COVID-19 after early clinical trials showed it helped patients recover more quickly from the illness, Reuters reported on Wednesday.last_img read more

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‘God gave me 10 fingers to work’: NTT resident refuses govt COVID-19 aid in viral video

first_imgAn elderly resident of Alor regency in East Nusa Tenggara has refused to accept government-distributed staple food aid, saying that she would rather work for it on her own.In a video that has gone viral on social media, Salomi Malaka, the wife of a farmer and mother of three, repeatedly refused aid in the form of a Prosperous Family Card (KKS), a card that can be used to purchase staple food. The government has been distributing the KKS to cushion the impact of COVID-19 on poor residents.“[I want to] work for it on my own first. God gave me 10 fingers to work so I have to make the effort,” Salomi said in the video posted on Friday by Instagram user @baliaman_. Nazamuddin, Alor regency’s staple food aid distribution coordinator, confirmed that the events in the video occurred on Tuesday when aid distribution officials went to Salomi’s house. The officials visited her after Salomi, whose family is eligible for the aid, did not show up during the KKS distribution.“We decided to visit her house so we can explain the staple food aid program that is being offered during the COVID-19 pandemic,” Nazamuddin said on Friday as quoted by kompas.com. “We initially insisted that she accept the aid, but she kept refusing.”The officials then decided to return her KKS aid to the Social Affairs Ministry’s Poverty Management Directorate General, and gave her face masks that she can use when buying food at the local market instead.Initially launched in February 2017, the KKS staple food aid – to be distributed from April to December – is set to cover 20 million poor Indonesians. On March 31, President Joko “Jokowi” Widodo announced that the KKS benefits would be increased to Rp 200,000 (US$13.96) per month per family from Rp 150,000.The staple food assistance is a part of the government’s COVID-19 social safety net programs valued at Rp 110 trillion (US$6.7 billion), where other portions of the fund would be allocated for the family hope, preemployment card and free or discounted electricity programs. (mfp)Topics :last_img read more

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China official in Hong Kong says some protest acts “terrorist in nature”

first_img“The legislation will alleviate the grave concerns among local and foreign business communities about the violent and terrorist forces,” Xie said.His comments added to a chorus of strengthening government rhetoric against protesters in the Chinese-ruled city, where security officials cited cases involving explosives “commonly used in terrorist attacks overseas” as a growing concern.The proposed legislation, which could also see Chinese intelligence agencies set up bases in one of the world’s biggest financial hubs, sent Hong Kong’s stock market tumbling last week and drew condemnation from Western governments.Pro-democracy activists fear it would limit rights and freedoms guaranteed under a “one country, two systems” agreement made with Britain on Hong Kong’s 1997 return to Chinese rule.But Xie said the legislation would, in fact, strengthened it and rights would be preserved.”Do not be intimidated or misled, exploited by those with ulterior motives and in particular, do not be a rumour monger yourself, or join the anti-China forces in stigmatizing or demonizing the legislation,” he said, addressing “law-abiding citizens and foreign internationals who love Hong Kong”.Topics : China’s foreign ministry office in Hong Kong said on Monday some actions during last year’s pro-democracy protests were “terrorist in nature” and “troublemakers” colluded with foreign forces, posing “imminent danger” to national security.Xie Feng, commissioner of China’s Ministry of Foreign Affairs in Hong Kong, made his remarks during a speech on proposed national security legislation in Hong Kong, in which he sought to reassure foreign investors they would not be affected.Xie said the law tackled secession, subversion, foreign interference and terrorism and would only affect a small number of residents, while for the rest “there was absolutely no need to panic”.last_img read more

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Serie A meeting Italian government to discover fate of season

first_imgThey hope the season will resume fully on June 20, with the goal of awarding the league title, defining promotions and relegations, before playing Italian Cup semi-finals, with the final in early August. The closing stages of the European club competitions could also be played in August. Three Italian clubs are still in the Champions League and two in the Europa League. Clubs returned to group training on May 19 but competitive action remains suspended until mid-June.The indications are that Spadafora and the government’s Scientific Technical Committee will agree to both implementing a health protocol and to resume the season.If there is a green light on Thursday, Lega Serie A will meet Friday to examine “the different calendar hypotheses” for the remaining Serie A and Italian Cup matches.The league wants competition to resume on the weekend of June 13-14, starting with four postponed fixtures — Atalanta-Sassuolo, Verona-Cagliari, Inter Milan-Sampdoria and Torino-Parma. ‘Risking safety’ But not everyone agrees with a return to the pitch and the packed schedule required with teams needing to play three matches a week, in hot summer conditions.Brescia and Torino, situated in the northern regions of Lombardy and Piedmont respectively, which accounted for nearly 60 percent of Italy’s COVID19 deaths, have consistently opposed to a return.”To finish this championship is forcing it in my opinion,” Brescia captain Daniele Gastaldello said this week. “It’s risking the safety of the players.”Brescia are sitting last in the league, and have nothing to gain by concluding this nightmare season.Torino president Urbano Cairo, whose club are 15th, would also gladly abandon the season.”I bow to the majority choice,” said Cairo, voicing his concerns over “the short time between the end of this season and the start of the next one,” scheduled for September 1.AC Milan’s Swedish forward Zlatan Ibrahimovic, one of the big stars of the championship, has already suffered a calf injury in training, and could be out for a month.”I think it’s chaos,” said Italy coach Roberto Mancini.”If I were to speak only as a coach, I would prefer it to stop and start calmly next season.”There is going to be an endless series of matches and I don’t know what state the players will be in.”On Friday, the ‘Plan B’ will also be analyzed at the Lega Serie A meeting, a format with short playoffs to determine the title, European places and relegation, if the season is again suspended, or all the matches not played.Another issue to be solved is that of players’ contracts and whether they can be extended to complete the season beyond its natural expiration.The issue of wage cuts also remains unresolved and liability in the event of illness remains complex. But one team who have been anxious to return to the pitch are Lazio.The Roman club were just one point behind leaders Juventus when the season was suspended, and within touching distance of the third Scudetto in the club’s 120-year history.”We miss football, I don’t speak only for myself or for our team. We hope that the right decision can be made soon to complete this championship,” said captain Senad Lulic.  Serie A’s hopes of following Germany and Spain back onto the pitch will be decided on Thursday in a meeting with the Italian government which will determine the fate of the season in Italy.Sports Minister Vincenzo Spadafora will tell representatives from the Italian football federation and Lega Serie A if the health conditions are right to return to action after nearly three months.The season has been on hold since March 9 when it was halted as coronavirus infections spread rapidly in Italy. The pandemic has killed almost 33,000 people in the country. Topics :last_img read more

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Indonesia needs to increase transparency in political parties over funding: NGO

first_imgTransparency International Indonesia (TII) has urged the government to increase transparency and accountability of political parties, especially as the country regulates state funding for the political parties. TII calls for the government to establish transparency measures for political parties under the National Strategy for Corruption Prevention (Stranas-PK).“Our corruption perception index in the last few years, and other monitoring, indicate that it is important for the Stranas-PK [to also watch out] for political corruption,” TII researcher Alvin Nicola said during a discussion with the Stranas-PK on Wednesday. “Political corruption actually has a big impact [on the perception index] so it is important for the Home Ministry to [push for] increased transparency and accountability among political parties,” he added.Read also: State should increase funding for parties, says KPKIn Transparency International’s 2019 Corruption Perception Index, Indonesia scored 40, an improvement of two points compared to 38 in the previous year. The 2019 index ranked Indonesia 85th out of 183 countries.Following the scoring that was released in January, TII researcher Wawan Suyatmiko said the improvement in Indonesia’s score was triggered by “strict law enforcement on bribery and corruption in the political system”. However, then-TII secretary-general Dadang Trisasongko said there were tasks — namely how to break corrupt relations among state officers, civil servants, law enforcement and businesspeople — that needed to be completed in the future.Government Regulation No. 1/2018 on Political Party Funding stipulates that parties winning seats at the House of Representatives receive Rp 1,000 (7 US cents) per vote, while those winning seats in regional legislative receive Rp 1,200 per vote.As it is possible that the funding will be increased in the future, the anticorruption NGO also urges the government to issue a comprehensive regulation on the annual political party funding.Topics :last_img read more

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Global smartphone sales plunge 20% in pandemic-hit quarter

first_imgTopics : Global smartphone sales saw their worst-ever slump in the first quarter as the coronavirus pandemic hit consumer spending, a market tracker said Monday.The Gartner survey found a 20.5 percent drop in the first three months of the year.The plunge came amid heightened economic uncertainty and government-ordered lockdowns in many parts of the world in March, Gartner noted. “Apple had a strong start to the year thanks to its new product line up that saw strong momentum globally,” said Annette Zimmermann, research vice president at Gartner.”Apple’s ability to serve clients via its online stores and its production returning to near normal levels at the end of March helped recover some of the early positive momentum.”Global sales amounted to 299 million units in the quarter compared with 375 million a year ago.center_img Another factor was the shutdown of factories, many in China, which produce the handsets for most of the major global smartphone makers, noted analysts at Gartner.The data showed Samsung keeping its leading position with 18.5 percent of the market even though sales were down more than 22 percent.Huawei remained at number two with a 14.2 percent market share, after a 27 percent drop in sales for the Chinese giant being hit with US sanctions.Apple held third place, seeing a more modest eight percent drop, giving the US firm a 13.7 percent share.last_img read more

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Hong Kong leader accuses US of ‘double standards’ over protests

first_imgLast week, China’s rubber-stamp parliament approved the plans for a law that would punish secession, subversion of state power, terrorism and acts that endanger national security — as well as allow Chinese security agencies to operate openly in Hong Kong.Beijing says the anti-subversion law — which will bypass Hong Kong’s legislature — is needed to tackle “terrorism” and “separatism”.Opponents fear it will bring mainland-style political oppression to a business hub supposedly guaranteed freedoms and autonomy for 50 years after its 1997 handover from Britain to China. Topics : Hong Kong’s leader accused the United States on Tuesday of applying “double standards” in its response to violent protests as she warned Washington’s plan to place trade restrictions on the financial hub would “only hurt themselves”.Semi-autonomous Hong Kong has been rocked by months of huge and often violent pro-democracy over the past year, which riot police have stamped out with more than 9,000 arrests.Washington has been critical of Hong Kong’s response to the protests with US President Donald Trump last week vowing to end the city’s special trading status after Beijing announced plans to impose a sweeping national security law on the business hub.center_img On Tuesday, Hong Kong’s Chief Executive Carrie Lam said such a move would be self-defeating as she took aim at the Trump administration for its own response to violent racial justice protests sweeping the United States.”We have seen most clearly in recent weeks the double standards that are around,” Lam, who was selected as city leader by a pro-Beijing committee, told reporters.”You know there are riots in the United States and we see how local governments reacted. And then in Hong Kong, when we had similar riots, we saw what position they adopted then.”Both Chinese and Hong Kong officials have seized on the unrest gripping the United States in their propaganda drive to justify their own crackdown on pro-democracy protests and the national security law plans.last_img read more

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