ISLAMABAD (PEN) : The Indonesian government is set to introduce a comprehensive economic stimulus package on June 5 aimed at revitalizing domestic consumption and supporting growth in Southeast Asia’s largest economy, a government spokesperson confirmed Saturday.
The move comes in response to slowing economic momentum, with Indonesia’s gross domestic product (GDP) expanding by only *4.87% year-on-year in the first quarter of 2025* — the country’s weakest performance in over three years. In light of this, Bank Indonesia has revised its full-year growth projection down to *4.6%-5.4%, from an earlier range of **4.7%-5.5%*.
Six-Part Stimulus Strategy in Development
Chief Economic Minister *Airlangga Hartarto* announced that the stimulus would encompass six distinct incentive programs currently being finalized by various ministries.
“We are preparing six packages. At the moment, each ministry is preparing the regulations,” Hartarto stated. “Hopefully this can be announced soon once regulations in each ministry are completed.”
While specific budgetary details have not yet been disclosed, the planned measures are designed to address both rising cost-of-living pressures and declining household consumption, which has traditionally been a major driver of Indonesia’s GDP.
Key Measures Include Electricity Subsidies and Cash Transfers
The incentives are expected to include:
* *50% discount on electricity bills* for select customer categories
* *Food assistance* during the months of June and July
* *Work accident insurance premium reductions*
* A *7-million-rupiah (\$430) subsidy* for electric motorcycle buyers
* *Toll road discounts*
* *Tax relief on airfare*
* *Cash transfers for low-income workers*
These steps aim to ease household financial burdens and stimulate activity in sectors such as transportation, energy, and retail.
Economic Outlook Pressures Policy Shift
Analysts attribute the recent downturn to weakening export demand and tepid domestic consumption, both affected by global economic uncertainty and inflationary pressures.
The Indonesian government has emphasized the importance of timely and targeted intervention to sustain growth and maintain public confidence ahead of further global economic headwinds.
As the country prepares to roll out this latest round of stimulus, policymakers remain focused on striking a balance between fiscal discipline and providing meaningful support to citizens and key industries.
