Indonesia to Launch Economic Stimulus to Boost Growth and Spending

Indonesia will unveil a new economic stimulus package on June 5 aimed at boosting consumer spending and reviving economic growth, according to the Coordinating Ministry of Economic Affairs. The measures are expected to help Southeast Asia’s largest economy reach 5% growth in the second quarter, following a disappointing 4.87% expansion in Q1—the slowest pace in over three years.

Chief Economic Minister Airlangga Hartarto stated that the package is designed to drive consumption, particularly ahead of the school holidays beginning in late June, which could enhance momentum and household spending. The central bank recently lowered its 2025 growth outlook to 4.6%-5.4%, down from 4.7%-5.5%, reflecting growing economic concerns.

While the total size of the package is still under calculation, key incentives include a 50% electricity bill discount for approximately 79.3 million households and food aid for 18.3 million low-income families throughout June and July. Additional plans involve direct cash transfers to low-income workers and reduced work accident insurance premiums for labor-intensive industries.

To stimulate domestic tourism, the government will offer airfare, train, and sea transport discounts during the school holiday period, which extends through mid-July. Furthermore, toll road users—estimated at 110 million—will benefit from discounted rates during June and July.

These short-term stimulus measures aim to lift domestic consumption, increase purchasing power, and support labor-intensive sectors while helping Indonesia stay on track with its economic recovery goals amid global uncertainty. The government hopes the early implementation of these policies will maximize their impact on second and third-quarter growth figures.