March 3, 2020 / 10:03 AM / a month ago

UPDATE 1-Indonesia to relax rules for export, imports to mitigate impact of virus outbreak

(Writes through with details of the planned measures)

By Bernadette Christina

JAKARTA, March 3 (Reuters) - Indonesia will soon announce a second policy package aimed at easing rules for exports and imports as supply chains have been disrupted by the spread of the new coronavirus, a senior government official said on Tuesday.

The measures follow the unveiling of a 10.3 trillion rupiah ($720 million) stimulus package last week to support consumer spending and tourism as well as the central bank’s announcement on Monday that it will step up intervention to support its currency and bond markets.

China, where the epidemic originated, is Indonesia’s biggest trading partner and a major source of investment and tourists. The government has said the slowdown in China could see Indonesia’s economic growth weaken to 4.7% this year compared with 5.02% in 2019.

“Our previous package focuses on people’s movements, this new one will focus on the movement of goods,” Susiwijono Moegiarso, secretary of the coordinating ministry for economic affairs, told a news conference.

He said rules would be eased for exports, such as those for timber, woodwork and furniture, as well as for the imports of supplies for manufacturers.

Officials are also looking at ways to cut logistics-related costs and there will also be fewer customs inspections for reputable importers to allow for the quicker entry of goods, Moegiarso added.

Some 500 companies who control 40% of raw material imports into Southeast Asia’s biggest economy will be affected by the relaxing of the rules, Finance Minister Sri Mulyani Indrawati said on Monday.

Indrawati also said the government is considering tax relief for companies facing pressure from the virus-induced global slowdown.

Separately, the government also said it was shelving a much criticised plan to provide 298.5 billion rupiah in incentives for airlines, travel agents and social media influencers to bring in foreign tourists.

Indonesia on Monday confirmed its first two cases of coronavirus infection after two citizens came into contact with an infected Japanese woman last month.

The news triggered panic buying in some of Indonesia’s biggest cities, but retailers have enough stock to keep prices stable, said Roy Mandey, chairman of the retailers association. ($1 = 14,275 rupiah) (Reporting by Bernadette Christina Munthe and Maikel Jefriando; Writing by Gayatri Suroyo; Editing by Edwina Gibbs)

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