The Indonesian government announced a new economic stimulus package of 16.23 trillion rupiah ($989 million) on Monday, the third of its kind this year. The package is designed to boost economic growth, revitalize household spending, and create temporary jobs for hundreds of thousands of citizens.
The plan, dubbed the ‘8+4+5’ package, consists of several short-term acceleration programmes that cover multiple sectors to support workers, students, and key industries, according to chief economic minister Airlangga Hartarto. It will run through the end of 2025, with some measures extended until 2026.
“This 16 trillion-rupiah allocation is for this year, and part of the funding has already been budgeted within ministries and other sectors,” Hartarto told the press in Jakarta following a cabinet meeting.
Employment is one of the key priorities in the package, with 5.3 trillion rupiah allocated for cash-for-work programmes managed by the transportation and public works ministries. The programmes, which focus on building infrastructure and housing projects in rural areas, are expected to provide jobs for more than 600,000 people between September and December this year, Airlangga said.
Another 198 billion rupiah were also earmarked to fund six-month internships for 20,000 recent university graduates, and 120 billion rupiah for an expanded income tax subsidy covering over half a million workers in the hotel, tourism, and café industries.
Other major initiatives covered by the stimulus package include 7 trillion rupiah worth of food aid and 2.7 trillion rupiah for an urban renewal pilot in Jakarta to build settlements and small marketing platforms.
Airlangga expressed optimism that the stimulus measures will help the government achieve its 5.2% economic growth targets this year. Indonesia’s economy grew by 5.12% annually in the second quarter, its best growth rate in two years, despite policymakers' warnings of an imminent slowdown in the next quarter.
Finance Minister Purbaya Yudhi Sadewa said the new measures are not expected to impact the forecast for the 2025 budget deficit, which is projected to be at 2.78% of GDP.
In a related move, Housing Minister Maruarar Sirait also said state banks will disburse 130 trillion rupiah in construction loans to selected property developers and small businesses.
Maruarar added that the government will cover 5% of the annual interest cost of these loans as part of the Prabowo administration’s efforts to provide 3 million affordable homes annually and create more jobs.