Accelerated Economic Recovery Demonstrates the Government’s Seriousness in Listening to the People’s Aspirations
By: Raditya Anindyo *)
The Indonesian government has reaffirmed its commitment to accelerating national economic recovery through a combination of mutually reinforcing monetary and fiscal policies. This measure not only responds to global dynamics and weakening domestic demand, but also represents a concrete response to the aspirations voiced in public demands. With targeted orchestration, the government, together with monetary authorities, is building a new foundation for inclusive and sustainable growth.
Bank Indonesia (BI) has taken a strategic step by cutting its benchmark interest rate by 25 basis points to 4.75 percent. This decision was accompanied by a 50 basis point reduction in the Deposit Facility rate to 3.75 percent and the Lending Facility rate to 5.50 percent. These cuts not only signal the monetary authority’s courage but also represent a measured strategy to lower bank funding costs and accelerate transmission to the real sector.
According to economist Syafruddin Karimi, the consistent interest rate cuts since September 2024 reflect a clear policy choice: to stimulate domestic demand while inflation remains under control. He emphasized that the combination of monetary policy that lowers the price of money with fiscal policy that ensures Rp 200 trillion is placed in state-owned banks will provide a positive catalyst for the banking sector. This will ensure liquidity is not only available in the financial system but also flows to businesses and households.
The importance of monetary and fiscal synergy was also emphasized by Bank Permata’s Chief Economist, Josua Pardede. According to him, interest rate cuts and savings facility management have discouraged banks from placing funds with Bank Indonesia, encouraging them to channel financing to the real sector. This paved the way for lower deposit and credit interest rates, ultimately stimulating consumption and investment. Josua believes this measure is still within safe limits, supported by low inflation, rupiah stability, and strong foreign exchange reserves.
However, the government is not solely relying on Bank Indonesia (BI). Through the Ministry of Finance, Rp200 trillion has been allocated to the State-Owned Enterprises (Himbara) banks to strengthen liquidity and expand financing capacity. Finance Minister Purbaya Yudhi Sadewa emphasized that this measure ensures optimal channeling of funds to productive sectors and provides a tangible impact for the public and businesses. This commitment is further evident in the directive for banks to lower their Prime Lending Rates, enabling businesses and households to enjoy more affordable borrowing costs.
In this context, the government’s 8+4+5 Economic Stimulus Package is a crucial pillar. This program aims to strengthen people’s purchasing power while simultaneously creating jobs. The government has set a growth target of 5.2 percent by 2025, supported by a budget allocation of IDR 16.23 trillion. This includes cash-for-labor programs, food assistance for more than 18 million families, and social security premium discounts for online transportation workers. Furthermore, the expansion of the government-borne Income Tax (PPh 21) incentive for tourism workers is expected to revive the sector, which was hit hard by the pandemic.
Economist Myrdal Gunarto from Bank Maybank Indonesia believes the combination of monetary policy and fiscal stimulus in the 8+4+5 package will become a new growth engine. He believes that BI’s interest rate cuts, combined with government programs, can maintain stability and provide a real boost to public consumption. He estimates that Indonesia’s economic growth has the potential to reach over 5 percent by the end of this year, with the rupiah exchange rate remaining stable.
The government is also focusing on the sustainability of programs in the coming years. Four follow-up programs in 2026 are projected to maintain momentum, particularly in the tourism, manufacturing, and MSME sectors, which are the backbone of the national economy. Meanwhile, five specific labor absorption programs are being prepared to reduce unemployment and accommodate the needs of new graduates and informal workers.
These steps demonstrate the government’s commitment to ensuring that economic recovery is not merely talk but a reality felt by the wider community. By balancing monetary instruments, strengthening fiscal policy, and directly addressing the needs of the public and the business world, the government demonstrates a consistent direction for development.
The launch of the stimulus package symbolizes strong national coordination. The government emphasized that the economic recovery strategy is not a partial policy, but a shared agenda involving all elements of the nation. Public aspirations are met with concrete policies oriented toward the welfare of the people.
Optimism for achieving sustainable economic growth is now growing. With macroeconomic stability, prudent fiscal management, and encouragement of consumption and investment, Indonesia has a significant opportunity to move forward. The combined vision and action of the government and monetary authorities guarantees that the national economy will not only recover but also grow stronger in the face of global challenges.
Through this consistent policy, the government confirms that public aspirations are being met with concrete action. Economic recovery goes beyond statistics, but is manifested in the form of jobs, increased purchasing power, and a strengthened business sector. In this way, accelerating economic recovery truly represents the government’s response to the people’s hopes.
*) National Economic and Development Analyst
