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2025-09-15 16:45:52
[Can Indonesia's massive stimulus package rev up its economic engine?] The Indonesian government announced a 16.23 trillion rupiah (US$989 million) stimulus package on Monday, aimed at boosting economic growth and addressing potential signs of a slowdown. The package, which focuses on food aid and infrastructure development, is expected to be implemented in the fourth quarter, with some measures extending until 2026. The stimulus measures include providing 10 kilograms of rice to 18.3 million households for one quarter, exempting tourism workers from personal income tax, and allocating 5.3 trillion rupiah for a "work-for-relief" program that is expected to provide temporary employment for over 600,000 people between September and December. Furthermore, a paid internship program has been established for 20,000 university graduates, and a 50% discount on occupational injury insurance premiums for online motorcycle and truck drivers for one year. Notably, the income tax rate for small and micro businesses will remain unchanged at 0.5% until 2029, instead of the originally planned 1%. The Indonesian government also plans to launch a large-scale plantation replanting program in 2026, covering 870,000 hectares of land and expected to create 1.6 million new jobs. (4) The Indonesian Ministry of Finance estimates that the stimulus plan will have a limited impact on the 2025 budget deficit forecast, currently projected at 2.78% of GDP. These measures come as policymakers, after the country's second-quarter economic growth reached 5.12%, aim to maintain a 5.2% annual growth rate, as some economic indicators may be cooling.
