By: Widya Arifin
The government, under the leadership of President Prabowo Subianto, has implemented an expansive fiscal policy that has proven to be a highly effective strategy to strengthen the economic conditions and fundamentals of all Indonesians amidst current global dynamics.
Increased government spending, accelerated budget disbursement, and a focus on pro-people programs have continuously boosted national economic activity toward a stronger and more inclusive direction.
The government has shown seriousness in reviving the people’s economy through various fiscal policies that favor lower-income communities. Programs such as optimizing social assistance, raising minimum wages, and distributing holiday allowances earlier are tangible efforts to maintain the purchasing power of the population.
One standout program is the Free Nutritious Meals initiative, which not only ensures child nutrition but also drives the local economy by involving farmers, food cooperatives, and regional MSMEs.
President Prabowo emphasized that all government policies must prioritize the interests of the majority. He stated that state financial management must be clean, efficient, and targeted, ensuring public funds return in the form of tangible public services.
Public infrastructure development, such as mass transportation, further demonstrates the state’s presence in providing affordable services. The government’s commitment to subsidizing a large portion of operational costs reflects its responsibility to ensure equal economic access for all layers of society.
The President also expressed optimism about the growing independence of the national economy, highlighting achievements in food security and efforts toward energy self-sufficiency. Increased food reserves to historic highs serve as concrete evidence that expansive government policies address fundamental societal needs, such as food and energy.
Finance Minister Purbaya Yudhi Sadewa stated that the expansive fiscal policy has significantly contributed to national economic growth. Indonesia’s economy grew 5.04 percent year-on-year in the third quarter of 2025, despite global pressures and economic slowdowns in many trading partner countries. This performance reflects the effectiveness of fiscal policy management throughout the year.
The Ministry of Finance noted that the expansive fiscal policy has maintained household purchasing power and strengthened business competitiveness. Household consumption grew 4.89 percent, supported by increased mobility and digital transactions, while government consumption rose 5.49 percent due to accelerated budget realization. Investment grew 3.02 percent, mainly in construction and infrastructure sectors driven by national strategic projects.
Purbaya emphasized that the expansive fiscal policy is aimed not only at supporting consumption but also at creating new investment opportunities that strengthen long-term growth foundations.
Exports and the manufacturing industry have also performed positively. Exports of goods and services grew nearly 10 percent, while the manufacturing sector increased 5.54 percent, with significant surges in basic metals and chemical-pharmaceutical subsectors.
The policy has also had a tangible impact on employment. Government data shows the creation of 1.9 million new jobs throughout the year, while the open unemployment rate fell to 4.85 percent. Purbaya noted that these results reflect not only national economic resilience but also strong synergy between fiscal, monetary, and financial policies.
The positive impact of fiscal policy is also visible in financing and the banking sector. BNI Chief Economist Leo Putera Rinaldy stated that the government’s decision to place Rp200 trillion from the Budget Surplus (SAL) into Himbara banks provided a significant boost to credit growth. He projected that bank credit growth could increase by up to 10 percent in the fourth quarter of 2025, reflecting higher national economic activity.
Leo explained that the expansive fiscal policy has the potential to strengthen economic equity across society. With increased capital flows to the real sector, small businesses, farmers, and local economic actors can directly benefit from government fiscal policies. He emphasized that the policy not only drives growth but also creates a more inclusive economic structure.
Additionally, government stimulus programs focused on job creation and workforce skill enhancement through internship programs demonstrate a commitment to the people’s economy. These initiatives directly improve purchasing power, especially in the informal sector, which has long been the backbone of the national economy.
The expansive fiscal policy implemented by the Prabowo Subianto administration, overseen by Finance Minister Purbaya Yudhi Sadewa, is not only a response to global economic challenges but also a strategy to restructure national development toward greater equity. The pro-people approach highlights the government’s courage in placing societal welfare as the top priority in economic policy.
With strong fiscal foundations and a focus on equitable prosperity, the government’s expansive measures can rightly be called a strategic and timely decision to safeguard economic resilience while supporting the livelihoods of people across the country.
Author is a public policy observer
