Rp 24 Trillion for the People, Government’s Strategy to Maintain Economic Growth Amidst Global Pressure

By: Ricky Rinaldi
Amid global economic uncertainty due to geopolitical turmoil and weakening commodity prices, the Indonesian government moved quickly. Instead of being passive, the country launched an economic stimulus of IDR 24.44 trillion to keep national economic growth on track, especially in the second quarter of 2025.
This step not only reflects the country’s fiscal strength, but also a strategy that directly touches the needs of the community. The government has set six main policies that target public consumption. Among them are a 30 percent discount on train tickets for millions of passengers, VAT incentives for economy class plane tickets, and a 50 percent cut in ship fares. In addition, toll roads are also free on a limited basis during school holidays.
The government is also again distributing wage subsidy assistance for low-wage workers and providing additional food assistance to more than 18 million underprivileged families. All of these programs will run from June to the end of July 2025, with the main funds coming from the state budget and a small portion from contributions from state-owned enterprises.
Finance Minister Sri Mulyani Indrawati said that this stimulus was designed to maintain national economic growth close to 5 percent in the second quarter of 2025. She emphasized the importance of channeling the power of the APBN directly to the community who are currently facing cost of living pressures. According to her, this policy is also a form of fiscal responsibility that is measurable and has a real impact.
Support from the monetary side is no less strong. Bank Indonesia Governor Perry Warjiyo explained that BI has lowered the benchmark interest rate to 5.50 percent as a step to encourage credit distribution and domestic consumption. He considered that this policy maintains price and exchange rate stability while stimulating economic growth. The combination of fiscal and monetary measures, according to Perry, is an important strategy so that Indonesia does not get caught in a deeper economic slowdown.
From the analysts, Chief Economist of Trimegah Sekuritas, Fakhrul Fulvian, assessed that this stimulus package is a fairly effective initial step to stimulate consumption. However, he reminded that after this stimulus is completed at the end of July, the government needs to accelerate the realization of state spending, especially for infrastructure. He believes that the sustainability of economic growth is highly dependent on the movement of state spending in the second semester.
The Central Statistics Agency (BPS) recorded Indonesia’s economic growth in the first quarter of 2025 at 4.87 percent annually, with household consumption contributing more than half of the total Gross Domestic Product (GDP). However, pressure on people’s purchasing power is increasingly felt due to the increase in the cost of living. Therefore, stimulus that directly touches basic needs such as transportation, energy, and food is considered very appropriate and needed.
The momentum of the stimulus launch is also considered strategic because it coincides with school holidays and Eid al-Adha—two periods when public consumption usually increases. This policy not only stimulates household spending but also helps reduce the burden of living costs for small families and vulnerable workers.
Furthermore, the steps taken by the government and Bank Indonesia show solid policy synergy. On the one hand, fiscal is driven to drive consumption, and on the other hand, monetary is managed to maintain macroeconomic stability. Until May 2025, the national inflation rate remains under control at below 3 percent and foreign exchange reserves are in a sufficient position to maintain external resilience.
While global challenges still loom, this policy sends a strong signal that the state is present and responsive. It is proof that fiscal strength is not only reflected in numbers, but in real actions that are felt directly by the people.
This policy also has a positive effect on business actors, especially MSMEs which have been the backbone of the national economy. With increasing mobility and household consumption, demand for MSME goods and services is expected to increase, opening up space for accelerating the recovery of the informal sector.
Not only short-term, the government’s courage to roll out stimulus in these difficult times also shows a commitment to maintaining the momentum of structural reform. Participation in the lower classes and real economic actors is an important foundation for inclusive and sustainable long-term development.
On the other hand, the role of local governments is also key to the success of implementing this stimulus. The central government encourages synergy across levels of government so that the distribution of aid and the implementation of incentives run smoothly to remote areas. This collaboration is important so that no community is left behind in receiving the benefits of the policy, while accelerating the economic recovery of regions that are still affected by inequality in access and infrastructure.
Industry players and business associations also welcomed the government’s move. Many believe that with the increase in people’s purchasing power, production and distribution activities will also be encouraged. This is expected to create a chain effect, starting from increasing business turnover to reopening jobs. In the midst of a global slowdown, policies like this are proof that optimism can still be built through policies that are on the side of and responsive to the needs of the people.
*)Strategic Issues Observer