Indonesia Accelerates Reforms to Sustain Strong Economic Growth in 2025

Coordinating Minister for Economic Affairs Airlangga Hartarto and a number of ministers deliver a press statement after joining a Plenary Cabinet Meeting at the Presidential Palace, Jakarta, Thursday (08/07). (Photo by: BPMI of Presidential Secretariat)

The Government has affirmed its commitment to maintaining Indonesia’s economic growth through several strategies, including accelerating investment, providing ease of obtaining business permits, and increasing household consumption.

“The President has issued directives following the latest development of economic condition. Achieving economic growth of 5.12 (percent), placed us among the tops in G20 and ASEAN countries,” Coordinating Minister for Economic Affairs Airlangga Hartarto said in a press statement after joining a Plenary Cabinet Meeting at the Presidential Palace, Jakarta, Thursday (08/07).

The Minister added that Indonesia also saw an increase in employment rate where 97.73 percent of working-age population is employed, an increase of 3.59 million people over the past year.

According to him, President Prabowo Subianto also highlighted the importance of competitiveness, and called for the acceleration in business permit reforms.

“The Government has issued a regulation concerning ease of obtaining business permits which emphasizes a positive approach. The regulation needs to be disseminated across all institutions to ensure the licensing system through OSS can function effectively,” he added.

The Government, the Minister added, is also focusing on efforts to maintain public purchasing power and household consumption in the second half of 2025 through formulation of several key programs such as initiatives to boost regional investment, exports, and financing for the housing sector.

“For housing sector, we have FLPP (Home Ownership Credit Facility Housing Liquidity Assistance Program), the newly-launched Housing Microcredit which is a revolving loan, where an initial credit of Rp5 billion can be revolved up to four times, totaling up to Rp20 billion. This is aimed at boosting the construction sector and is specifically designated for contractors categorized as MSMEs,” he explained.

In addition, Government-borne Value Added Tax (PPn DTP) of 100 percent for home purchases up to Rp2 billion will still be available until the end of 2025. The Government is also preparing strategic programs to anticipate the upcoming Christmas and New Year period.

The President is set to deliver the 2026 State Budget in his address on August 15.

In the meantime, non-budgetary programs that can strengthen the investment climate must remain a top priority for ministries and institutions.

“The President has ordered that all non-budgetary programs must continue to be promoted by Ministries and Institutions, as investment is the key to driving future economic growth,” he said. (BPMI of Presidential Secretariat) (RAS/EP)