Jakarta – The government continues to strengthen expansionary fiscal policy to maintain the momentum of national economic growth, ensuring it remains on track to achieve the 5 percent target throughout 2025. Several indicators show that, despite persistent global pressures, productive and well-targeted government spending policies have become a key pillar of national economic stability.
The Head of Macroeconomics and Finance at the Institute for Development of Economics and Finance (Indef), Muhammad Rizal Taufikurahman, predicts that Indonesia’s economic growth in the third quarter of 2025 will be in the range of 5.0–5.2 percent, a slight increase from the 5.12 percent achieved in the second quarter.
According to Rizal, this increase is not entirely due to the structural strength of the economy, but is instead supported more by fiscal stimulus and short-term consumption.
“The economy is growing because it is driven, not because it is strengthening. Expansive government spending and stable food prices do provide room for consumption, but the purchasing power of the lower-middle class has not fully recovered,” Rizal said.
He added that domestic consumption activity is currently driven more by government budget realization, while private investment remains cautious.
“Gross Fixed Capital Formation (PMTB) data has not shown a significant surge. The private sector is still holding back expansion due to global uncertainty and high lending rates. The engine of growth is still driven from above, not driven by market dynamics,” he explained.
The central government’s fiscal performance is considered successful in supporting economic stability in various regions. The Head of the Regional Office of the Directorate General of Treasury (DJPb) of South Kalimantan Province, Catur Ariyanto Widodo, stated that the distribution of Regional Transfers (TKD) in his region has shown stable, timely, and progressive results.
He stated that this positive performance is crucial for regional fiscal stability and supports improving the quality of public services throughout South Kalimantan.
“The realized fiscal incentives amounted to Rp113.73 billion, or 64.39 percent of the budget. These funds are provided as a token of appreciation to regions that demonstrate good performance in financial management and development. These incentives are expected to motivate regional governments to continue improving their performance,” said Catur.
He emphasized that with fiscal budget support from the central government, synergy between the central and regional governments can be strengthened in supporting inclusive and sustainable economic growth.
“With the support of the Regional Budget (TKD), regional governments in South Kalimantan can improve the quality of public services, accelerate spending absorption, and strengthen regional fiscal resilience to encourage inclusive and sustainable economic growth,” he added.
Meanwhile, Gundy Cahyadi, Research Director of the Prasasti Center for Policy Studies (Prasasti), assessed that from a fiscal perspective, government spending realization as of September 2025 had only reached 59.7 percent of the annual target, lower than the 64.7 percent achieved in the same period the previous year.
He believes this situation actually opens up room for acceleration in the fourth quarter, when ministries and agencies typically accelerate budget absorption.
“The combination of monetary and fiscal policies remains well-maintained. Bank Indonesia’s monetary easing maintains liquidity without causing capital flow volatility, while disciplined fiscal management provides space for more targeted stimulus. This synergy supports stable and sustainable growth,” said Gundy.
According to him, the Indonesian economy is currently on a stable and measured path. The potential for increased growth depends on accelerated government spending and sustained investment at the end of the year.
“Currently, the growth rate of around 5 percent is considered solid and reflects the fundamental resilience of the Indonesian economy amidst uncertain global dynamics,” he said.
With a combination of expansive fiscal policy, strong synergy between the central and regional governments, and prudent monetary management, the government is believed to be able to maintain national economic stability while strengthening the foundation for inclusive and sustainable growth.
