Indonesia launches economic stimulus package to boost purchasing power
The Indonesian Government has rolled out an economic stimulus package worth IDR24.44 trillion (nearly $1.53 billion) to maintain consumer purchasing power and stabilize the national economy.
A supermarket in Indonesia. Photo courtesy of thejakartapost.com.
The stimulus is strategically timed to coincide with the June-July school holiday season, aiming to boost consumption and economic growth. It includes measures ranging from transportation subsidies to social and employment support, Finance Minister Sri Mulyani Indrawati said on Monday.
To support people's travel, the Indonesian Government is reducing public transport fares, including a 30% discount on train tickets, a 6% exemption from VAT on airfare, and a 50% discount on sea transportation fares.
The program is estimated to cost around IDR0.94 trillion and is being implemented with the participation of the Ministry of Finance, the Ministry of Transport, and the Ministry of State-Owned Enterprises.
Meanwhile, the Ministry of Public Works and Public Housing is coordinating a 20% discount on tolls, targeting around 110 million motorists. The initiative has a total estimated funding of IDR650 billion and uses no state budget.
The government will also provide social assistance, comprising an additional basic food card worth IDR200,000 per month and food aid of 10 kilograms of rice, for 18.3 million beneficiary families during the two months.
In the employment sector, the Ministry of Manpower and related agencies have distributed wage subsidy assistance to 17.3 million workers earning less than IDR5 million per month. The total budget for this programme is IDR10.72 trillion.
The Ministry of Finance will also reintroduce a 50% discount on work accident insurance contributions for workers in the labour-intensive sector.
Southeast Asia’s largest economy grew 4.87% in the first quarter of 2025, the lowest in more than three years. Bank Indonesia has lowered its growth forecast for 2025 to 4.6-5.4% from the previous projection of 4.7-5.5%.
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