The Asian Development Bank (ADB) has approved a US$1.5 billion loan to support Indonesia’s efforts to combat the impact of the COVID-19 pandemic on public health and the economy.
ADB president Masatsugu Asakawa said on Thursday the pandemic had a devastating health, social and economic impact on Indonesia, urging the government to respond to the crisis through “strong and well-coordinated economic and fiscal measures”.
“ADB’s budget support will help the government address the challenges posed by COVID-19, with a strong focus on the poor and vulnerable, including women,” Asakawa said in a statement.
“The quick-disbursing financing is part of a larger support package ADB will provide to help Indonesia respond to COVID-19, in close coordination with other development partners.”
The loan will be used to finance the government’s social assistance programs, boost resources for pandemic prevention and control, as well as to safeguard productive sectors and workers from economic meltdown.
Finance Minister Sri Mulyani Indrawati said that ADB’s support would help the government to mitigate the adverse COVID-19 effects. “We appreciate ADB’s response to help fulfill Indonesia’s urgent needs,” she added.
Indonesia’s economy is expected to grow by only 2.5 percent this year, the lowest in decades, from last year’s 5.02 percent, following weaker domestic demand as the country’s key trading partners suffer, according to a government projection.
ADB’s loan is part of the broader $7 billion loans expected collectively from the World Bank and Asian Infrastructure Investment Bank (AIIB), as well as to finance the country’s fight against COVID-19.