Economic Growth of 5.12% Marks Early Success of President Prabowo in Sustaining Consumption and Investment
By: Dewi Lestari
The administration of President Prabowo Subianto has demonstrated a clear and measured economic policy direction in strengthening the foundation of national growth. The latest data from Statistics Indonesia (BPS) records Indonesia’s economic growth in Q2 2025 at 5.12% year-on-year. This achievement sends a positive signal that the government’s strategies—particularly in boosting household consumption and investment—have yielded concrete results amid global economic uncertainties.
This recorded growth is higher than the previous quarter’s 4.87% and surpasses the achievement in the same period last year. Deputy for National Accounts and Statistical Analysis at BPS, Moh. Edy Mahmud, explained that this growth was primarily driven by two main components: household consumption and Gross Fixed Capital Formation (GFCF), or investment.
The rise in consumption was fueled by increasing demand for basic needs and high public mobility during religious and school holidays. Meanwhile, growth in investment reflects the revival of productive sectors in the economy.
In response to this achievement, the government is initiating a series of follow-up policies to maintain growth momentum. Coordinating Minister for Economic Affairs Airlangga Hartarto stated that the government is preparing the second semester 2025 economic stimulus package, with a continued focus on consumption and job creation. This stimulus builds on previous measures but includes adjustments to current conditions. Among the optimized programs are the expansion of labor-intensive public works, increased allocation for Labor-Intensive Investment Loans, and acceleration in the distribution of community-based self-help housing assistance.
Airlangga also emphasized the importance of preparations for the upcoming Christmas and New Year holiday season. To this end, the government will provide various incentives such as discounted public transportation tickets and the organization of national events to boost tourism and trade. These measures are expected to strengthen household purchasing power while spurring cash circulation in the real sector.
As a further commitment, the government is aligning fiscal policy to strengthen the resilience of lower-middle-class households. Finance Minister Sri Mulyani Indrawati explained that President Prabowo has approved five policy clusters within the stimulus package, covering transportation, social assistance, wage subsidies, and housing program enhancement. Each policy is designed to deliver a direct impact on purchasing power and sustain national economic activity.
Transportation subsidies are a key component in sustaining household consumption. Discounts on train, plane, and ferry tickets are aimed at reaching millions of passengers. The government is also offering toll fee discounts through a non-state budget cooperation scheme with toll road operators, demonstrating a collaborative approach between the government and the private sector to maintain growth momentum.
In terms of social protection, the government is allocating additional funds for food assistance and wage subsidies. Around 18.3 million recipients of the Staple Food Card will receive extra cash and rice assistance for two months. Meanwhile, wage subsidies are targeted at 17.3 million low-income workers, including honorary teachers, with aid amounting to IDR 300,000 per month. Additionally, occupational accident insurance premiums for workers in six labor-intensive sectors will receive a 50% discount to protect them amid global economic pressures.
BPS Chief Moh. Edy Mahmud noted that from the production side, the services sector recorded the highest growth surge, indicating a significant recovery in the tertiary sector. From the expenditure side, household consumption accounted for more than half of total GDP, while GFCF contributed nearly 28%. This demonstrates the effectiveness of government policies focused on high-contribution sectors for economic growth.
President Prabowo’s efforts to maintain economic stability and growth go beyond short-term policies. Strategic measures such as the Free Nutritious Meal Program, the construction of three million housing units, and the strengthening of village cooperatives reflect a long-term, inclusive, and sustainable economic development direction. These programs not only provide immediate effects on domestic demand but also create new job opportunities, helping to reduce structural unemployment.
The development of social and economic infrastructure is expected to maintain public resilience in the medium to long term. The government targets low-purchasing-power groups as priority beneficiaries, with Airlangga stressing that households in the bottom two income deciles will be prioritized for recruitment in national strategic programs.
The 5.12% economic growth in the second quarter is tangible evidence of measured and adaptive policymaking. Through strengthened domestic consumption, needs-based stimulus, and the stimulation of productive sectors, the government is showing full commitment to maintaining stability and accelerating national economic recovery. President Prabowo’s policies not only respond to short-term challenges but also lay a strong economic foundation for facing future global uncertainties.
With systematically designed measures that prioritize the broader public interest, Indonesia’s current economic development path offers promising prospects. Collaboration between ministries, the business sector, and the public is a key element in creating growth that is not only high in numbers but also of quality and inclusive in nature.
Public Policy Observer
