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Indonesia's Economy, Link 1, Firms in multiple industries will shut…

- - - - impacts
        
        Increase in prices due to products becoming scarce
        
        Prices might rise so high that no one will buy them
        
        If the firm gets not enough demand, they might have to lay off their workers which causes increase in unemployment. If there are firms willing to hire new employees, they will most likely offer small income since right now everything is expensive and they need to prioritise saving.
        
        If workers aren't able to get another job, their skills will become dull and this will decrease the economy's efficiency. Their work incentives will also decrease since they don't feel motivated to work if they are just going to get small income.
        
        If these workers still stay unmotivated, they might have to rely on welfare payments from the government which will cause the government to have to increase public expenditure. Poverty rates will also increase in the economy because of that. This is not good as right now the government is already suffering loss from the lack of international trade and funding is required for covid prevention.
        
        If the government increases public spending, they might cause a budget deficit and this might cause an increase in national debt. If the government chooses to borrow from private sectors and end up borrowing to much, they might crowd out the private sectors and they won't have the money to continue production which decreases the total output of the economy which slows down economic growth.
      - The demand pull inflation is the most common inflation right now.
      - The inflation is caused by people buying things and basic necessities in bulk which causes excess demand and output is not able to keep up which is why it is demand pull inflation.
    - - Since people aren't going out to eat, businesses that include food such as restaurants and bars are mostly closing down and laying off their workers since they don't get enough profit to pay their workers.
      - Industries that have this problem also include those who have to work in tight place, industries that require physical contact, travel industry, plane industry, hotel industry and even construction industry.
        
        Food industry has already been explained before and industry with tight places or those that require crowds aren't able to work since there are no crowds as with PSBB, no one is allowed to be in crowded areas. People also avoid physical contact in order not to get the virus and they avoid meeting people.
        
        Travelling hasn't been allowed in some countries and there are some who have gone into a lockdown. Some countries also close airports and transportation to minimise the spread of the virus. Because of this, travel agencies suffered a big loss since no one is willing to travel and those who had planned on traveling chose to cancel their plans. This means there is a drastic drop in demand for the travel agencies.
        
        The plane industry and hotel industry will have similar problem. People will be canceling their flights which causes the firm to get less demand and the people such as flight attendants and pilots might not be getting any income at the moment since the firm doesn't get enough money to pay them. Those working in hotels will probably get laid off since the hotel doesn't get much demand due to people canceling their reservations and this causes the workers to get laid off.
        
        This also applies to those working in construction areas because those people will have to work out doors and stay outdoors for a long amount of time. Another reason is that construction workers work in teams and there are normally a lot of them working together for one project so they have to stop working at the moment and they will not get income because of that. Those in travel agencies however have a very large disadvantage from this.
        
        In the end the whole economy will be experiencing increased rates of unemployment, decrease in aggregate demand, and a decrease in government income. Why? Because Indonesia relies quite a lot on tourism and the government gets a significant amount of income from it. The decreases of travellers and foreigners entering the country means that there are less people visiting these tourist spots. For example no one is visiting Bali anymore due to covid and so there will be no revenue received from Bali's tourist site.This means less income for the government and which when combined with the decrease of income from everyone else, we can say decrease of national income.
        
        Due to the current situation, graduates that have jobs that cannot be done at home will not be employed and they won't be able to get small jobs like restaurant or bar work. There will be less opportunities for them and if they spend a long time unemployed, their skills might become dull and their efficiency will decrease which may slow down economic growth. Other graduates such as medical students will probably be put in the front lines to fight covid as the medical force needs as much help as they can get.
      - Since the government is introducing online learning and work from home, workers and people who aren't able to work from home will either get no income or cannot work. These people will mostly be from the informal sector. Even so, this will decrease the productivity of the economy. Online learning also decreases productivity because a lot of people aren't able to access online learning which means they cannot continue their education and training. With less skilled workers in the future, this will bring down the efficiency and productivity of the economy which will lead to a reduction in growth.
      - By the end of 2020, unemployment rate is expected to rise to 9.2% or 13 million people
- - - - 5.2% for 2018, 5.0% for 2019, 0.0% for 2020, 4.8% for 2021 (future prediction)
      - It shows that even though GDP was increasing, the rate it was increasing was decreasing and at 2020 due to covid, there was no growth but in 2021, the GDP growth is expected to increase to 4.8% which shows that the government are quite confident that they will be able to resume economic activities by 2021.
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