Solid Fundamentals, Government Optimistic Indonesian Economy Remain Strong

 Jakarta: Coordinating Minister for Economic Affairs Airlangga Hartarto emphasized that maintaining economic stability is a difficult task that must be shared not only by the government but also by all business actors. Regarding the current socio-political dynamics, the government is optimistic that the impact on the economy is only temporary and will subside in the near future.

"With these solid fundamentals, the impact of short-term volatility is expected not to alter our positive economic trajectory," Airlangga said at a press conference on the latest economic developments at the Indonesia Stock Exchange 

He noted that President Prabowo Subianto frequently emphasized the concept of Indonesia Incorporated, namely comprehensive collaboration between the government, the business world, and the public.

The government encourages companies, both listed on and off the stock exchange, to retain their existing workforce while creating new jobs. This commitment is crucial to realistically achieving the economic growth target of above five percent, while maintaining macroeconomic stability and public welfare.

"Of course, we all have a tough task to maintain the economy. Not just the government, but the entire economy," he emphasized.

Comprehensive strategy to achieve growth target

He explained that to achieve the 5.0-5.2 percent growth target in 2025, the government has prepared a comprehensive strategy that has been implemented since the second semester of this year.

The investment boost worth IDR924 trillion, a 32.5 percent year-on-year increase in capital goods imports, state-owned enterprise capital spending, and a 17.94 percent increase in government capital spending in the first semester will drive productivity through next year.

Furthermore, Airlangga explained that the IDR61 trillion economic stimulus in the first semester of 2025 will be continued with the economic stimulus in the second semester of 2025.

The government is also targeting state spending realization of at least 25 percent of the total state budget (APBN), equivalent to IDR694 trillion, including accelerated spending by major ministries/institutions, to maintain growth momentum.

Airlangga emphasized to capital market players that the government has the capacity and is fully committed to maintaining economic stability. Foreign exchange reserves are said to remain adequate, at USD 152 billion as of July 2025, equivalent to IDR 2,507.088 trillion (exchange rate of IDR 16,494). Furthermore, the banking system is considered healthy, along with strong synergy between fiscal, monetary/financial, and real sector policies.