JAKARTA: Indonesia’s latest stimulus package worth nearly US$1 billion not only aims to fuel economic growth but is also a political gesture to ease public discontent after recent mass protests, analysts said.
Announced on Monday (Sep 15), the 16.23 trillion rupiah (US$989.3 million) package is the third rolled out in 2025, following January’s 33 trillion rupiah boost and another in June valued at 24.4 trillion rupiah.
Though it’s the smallest in size this year, observers said it differs from the earlier packages by containing measures specifically aimed at addressing inequality and soaking up labour supply.
For instance, job creation initiatives – in the form of an internship programme for 20,000 university graduates, and a cash-for-work scheme for more than 600,000 people from the September to December period – can be seen as the government’s effort to respond to citizens’ demands in a more sustainable and measured way than the two previous stimulus packages, they said.
“I see this as a goodwill gesture,” said Deni Friawan, a researcher at the economics department of the Centre for Strategic and International Studies (CSIS) think tank.
“In the past the government was (accused of being) tone-deaf, but now they appear to acknowledge that the economy is slowing and that various problems need to be addressed.”
The impact appeared to be showing already, with a planned protest in Jakarta on Wednesday touted originally to involve up to 5,000 gig workers ending up with a subdued turnout, partly due to gloomy weather.
But even with the latest round of government spending, experts are doubtful Indonesia can achieve its target of 5.2 per cent economic growth this year, given the limited time left and other challenges that must first be addressed.
WHAT’S IN THE LATEST STIMULUS?
The new stimulus package, set to be implemented from the fourth quarter, was announced by Coordinating Minister for Economic Affairs Airlangga Hartarto, accompanied by Indonesia’s new Finance Minister Purbaya Yudhi Sadewa.
The package is divided into three categories dubbed “8+4+5”: Eight acceleration programmes for 2025, four follow-up economic programmes for 2026, and five job-creation initiatives.
Among the acceleration and job-creation programmes are paid internships for 20,000 university graduates, distribution of 10kg of rice to 18.3 million families, tax relief for certain categories of workers, a 50 per cent subsidy for accident insurance for ride-hailing motorcycle taxi drivers and truck drivers, as well as cash-for-work schemes under various government projects.
The government also aims to add a million jobs through the Red-White cooperatives scheme and the development of fishing villages across the country.
Plans for 2026 include replanting 870,000 hectares of plantations for commodities such as sugarcane, cocoa, coffee, cashew, nutmeg, and coconut, which is expected to create 1.6 million new jobs.
“With this stimulus, we hope government spending can be maintained. We aim to reach the 5.2 per cent growth target by the end of 2025,” Airlangga said at a press conference in Jakarta.
https://www.channelnewsasia.com/asia/indonesia-third-stimulus-package-2025-growth-target-5353446
