From within the country, the attention of market players is currently focused on the tightening of the Emergency Micro PPKM, which will be implemented from 3 to 20 July, which was announced by President Jokowi at the end of last June.
The policy was carried out to overcome the spread of the Delta variant of the COVID-19 virus and due to the high daily case spike in Indonesia, with the addition of daily cases breaking above 21,000 per day.
So far, economic activity is still allowed, although very limited. However, the tightening of the Emergency Micro PPKM will be a pressing factor for the retail sector, hotels, and other sectors, which are directly affected by the pandemic. Sectors related to population mobility have the potential to experience the deepest pressure. In addition, the manufacturing industry will also adjust to declining demand. The government said it was still trying to save the economy and the financial system so they could run stably.
President Jokowi targeted 2 million vaccines per day for August until last week. Vaccination had exceeded the target of 1 million vaccines per day. As of 30 June 2021, a total of 5% of Indonesia's population has been fully vaccinated (2 doses).
The Emergency Micro PPKM policy will certainly have an impact on the Indonesian economy. The projected growth of up to 8% in the second quarter has the potential to not be achieved. However, the economy will still grow better than in the second quarter of 2020, which experienced a contraction of -5.3%. Then, how about the whole year? Is it still on track with a projection in the range of 4.1% - 5.1%?
The Emergency Micro PPKM which will be implemented next week is not expected to have a major impact on market movements, in line with market prices, and must experience from the previous Large-Scale Social Restrictions (PSBB), so that currently the situation can be suppressed. However, with the surge in COVID-19 cases still occurring domestically, it can still provide volatility to the market. Going forward, market participants will continue to monitor the impact of the pandemic on economic recovery, accelerate vaccination, and various other external factors. The volatility that occurs in the JCI can be utilized to buy or averaging when the JCI weakens.
Source: BLOOMBERG, CNBC, CNN