Economist: Prabowo-Gibran Government’s Economic Stimulus Boosts Economic Growth

Jakarta – The government of President Prabowo Subianto and Vice President Gibran Rakabuming Raka has launched an economic stimulus package aimed at boosting consumption, investment, and production activities. This stimulus is expected to have a positive impact on the lower, middle, and upper classes.

University of Indonesia economist Fithra Faisal Hastiadi assessed that Indonesia’s economic growth in 2024 will remain quite good. “Since Quarter I to Quarter III, economic growth has always been above 5%, although there was a decline in Quarter III to 4.9%,” said Fithra.

However, Fithra highlighted the main challenge in the consumption sector. “Consumption growth has never managed to exceed economic growth. This shows that people’s purchasing power has not fully recovered,” he added.

To support consumption, the government has taken a strategic step by not increasing Value Added Tax (VAT) in 2025, in accordance with the mandate of Law Number 7 of 2021, VAT should be 12% in 2025. “The increase in VAT will only be focused on the wealthy, as regulated in PMK 131 of 2024. In addition, the government has also allocated an economic stimulus of IDR 265 trillion to compensate for the increase in VAT,” said Fithra.

In addition to consumption, the government is also paying attention to the production sector, especially through labor-intensive incentives. “With this incentive, the pressure on production costs which were previously the main challenge for the manufacturing sector can be reduced. If this stimulus is used effectively, there is the potential for additional economic growth of up to 0.5-1%,” explained Fithra.

These steps demonstrate the government’s commitment to maintaining national economic stability amidst global economic dynamics. [-red]