Indonesia launches economic stimulus package to boost purchasing power
The stimulus is strategically timed to coincide with the June–July school holiday season, aiming to boost consumption and economic growth.
The Indonesian Government has rolled out an economic stimulus package worth 24.44 trillion IDR (nearly 1.53 billion USD) to maintain consumer purchasing power and stabilise the national economy.
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 June 2.
To support people's travel, the Indonesian Government is reducing public transport fares, including a 30% discount on train tickets, a 6% exemption from value-added tax (VAT) on airfare, and a 50% discount on sea transportation fares.
The programme is estimated to cost around 0.94 trillion IDR 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 650 billion IDR and uses no state budget.
The government will also provide social assistance, comprising an additional basic food card worth 200,000 IDR 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 5 million IDR per month. The total budget for this programme is 10.72 trillion IDR.
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%./.
