Indonesia’s Economy Grows 5.45 Percent, Gov’t Prepares Further Economic Stimulus
Coordinating Minister for Economic Affairs Airlangga Hartarto stated that Indonesia’s economy grew by 5.45 percent, supported by improved investment performance and growth in productive sectors, reflecting the Government’s efforts to promote a more inclusive and sustainable economy.
“Indonesia’s economy has grown by more than 5 percent, reaching 5.45 percent. The figure is higher than the global average growth of around 3 percent, and Indonesia is one of the fastest-growing economies among the G20 countries, and among the highest growth countries in ASEAN, Mr. President,” Airlangga said in a plenary cabinet meeting marking the second year of Government’s real work for the nation, led by President Prabowo Subianto, at the Presidential Palace Jakarta, on Wednesday (10/21).
Airlangga highlighted that Purchasing Managers’ Index (PMI) rose to 52.4. Furthermore, our trade surplus is also positive at 7.25. Consumer confidence index reached at 118.1, while unemployment rate stood at 4.65 percent, its lowest level since 1994, Mr. President, and the Gini ratio improve to 0.368.” he added.
He went on to say that the Government continues to maintain fiscal discipline and financial system stability to support sustainable economic growth. He reported that the State Budget (APBN) deficit stood at 1.24 percent, remaining in line with the planned fiscal trajectory.
In the monetary sector, the Coordinating Minister extended his appreciation to the central bank Bank Indonesia for maintaining the benchmark interest rate at 5.75 percent.
“The yield on 10-year government securities stood at 7.21 percent. Foreign exchange reserves reached Rp146.3 billion, sufficient to finance 6.5 months of imports. Bank lending is growing at a double-digit rate of 13.65 percent, while third-party funds have grown by 10.94 percent. The banking sector’s capital position is also solid, Mr. President, at 24.10 percent, while the non-performing loan (NPL) ratio stands at a relatively low 2.11 percent,” he explained.
The meeting also discussed the implementation of economic stimulus measures for Q4 of 2026 that is being carried out in accordance with President Prabowo’s directives. The policy package is designed to maintain public purchasing power, strengthen household consumption, and maintain economic growth momentum through the end of the year.
“The One Person, One Bank Account program will be implemented in the fourth quarter, with a budget of Rp1.28 trillion. This will be followed by rice food assistance of 10 kilograms per month for 33.24 million beneficiary families, with an allocated budget of Rp17.54 [trillion]. In addition, wage subsidy assistance of Rp300,000 per month for three months will be disbursed in November and December. This assistance will be provided to 13.3 million workers, with a budget of Rp11.97 [trillion],” he said.
The Coordinating Minister also stated that the Government is preparing transportation stimulus to facilitate public mobility during Christmas 2026 and New Year 2027 holiday period. According to the report, the package, which was agreed upon in mid-year, is expected to benefit approximately 6.6 million people, with a total budget of around Rp883.4 billion.
The transportation stimulus, he added, will include a 30 percent discount on ferry ticket. The state-owned ferry operator PT ASDP will also offer a special price for port service. The Government will also cover Value-Added Tax (VAT) for international flight
In addition to the year-end stimulus measures, President Prabowo is also pushing for preparations of various additional programs expected to begin in January 2027. These programs are aimed at improving human resource quality, supporting workers’ purchasing power, expanding access to housing, and sustaining economic activities.
“For next year, the following programs expected to begin in January are among others the national internship program that is expected to reach 150,000 participants, while the national vocational training program will also continue, targeting 300,000 participants. In addition, the Government will cover the income tax (PPh) for employees earning up to Rp10 million per month across all sectors. The Government will also evaluate an increase in the current non-taxable income (PTKP) of Rp54 million, taking into account inflation and minimum wage levels,” he said.
In the housing sector, the Government is planning to continue offering VAT borne by the Government. The Government will also prepare contribution relief for the Job Loss Insurance and Death Insurance programs, along with enhanced employment social security benefits and support for subsidized housing loans (KPR).
“Furthermore, the Government will continue covering the [VAT] for houses priced above Rp2 billion and up to a maximum of Rp5 billion. Other measures include contribution relief for Job Loss Insurance and Death Insurance, additional employment social security benefits, subsidized housing loans for middle class. In addition, for the jewelry sector, the current gold purity standard of 99.99 percent, which is exempt under the existing provisions, will be revised, in line with the industry standard of 99.9 percent,” he concluded. (PR of Ministry of State Secretariat/DND) (RAS/MMB)
