Increased Investment, Government’s Step to Pursue Economic Strengthening
By: Nana Sukmawati
The government continues to accelerate economic strengthening strategies to maintain growth momentum amidst global challenges. One of the main steps being pushed is increasing investment as the mainstay of strengthening the national economy.
The economic growth in the first quarter of 2025 of 4.87 percent continues to show the resilience of the national economy amidst global pressure and the fourth quarter of 2024 of 5.02 percent—the government is optimistic that it will be able to achieve the growth target of 5.2 percent at the end of the year.
The Coordinating Minister for Economic Affairs, Airlangga Hartarto, said that the government will issue various strategic policies in the coming quarter to stimulate the economy. This step is considered crucial to maintain people’s purchasing power and expand employment opportunities.
One of the main strategies that will be implemented is strengthening social protection programs. The government will distribute social assistance through the Family Hope Program (PKH), the Basic Food Card, and the 13th salary for ASN in May-June 2025. The distribution of free nutritious meals (MBG) has also been increased.
These programs are designed to provide a multiplier effect on the national economy. With increased purchasing power, public consumption is expected to be vibrant again and encourage economic growth evenly.
The government is also reviewing the provision of additional incentives for certain sectors that show growth potential. These incentives will be adjusted to the conditions of sectors that are experiencing a slowdown, such as hospitality, while continuing to support growing sectors, such as food and beverages and agriculture.
In the previous quarter, the government provided a 50 percent electricity tariff discount and a discount on airline tickets during the Eid holiday. This policy has had an initial positive impact on people’s purchasing power and will continue to be strengthened with further strategies.
Airlangga Hartarto explained that this slowdown cannot be separated from global uncertainty, such as the tariff war between the United States and China, as well as the reciprocal tariff policy from the US. This situation puts pressure on exports and the investment climate in general.
The budget efficiency policy shows the government’s prudence in maintaining fiscal sustainability while still prioritizing growth. However, the government remains committed to maintaining fiscal stability for long-term sustainability.
The government has formulated a comprehensive investment strategy to support economic recovery. The establishment of the Job Expansion Task Force is the first step in opening up more job opportunities for the community.
Through the Presidential Instruction on Deregulation and the completion of the revision of the Presidential Regulation on Investment Business Sectors, the government wants to simplify investment procedures so that they are more attractive to domestic and foreign investors.
The government is also implementing a special investment credit scheme for labor-intensive industries. This step is expected to not only strengthen the industrial sector, but also open up millions of new jobs in various regions.
Optimizing BUMN capital expenditure and distributing People’s Business Credit (KUR) are also integral parts of the investment increase strategy. This will strengthen the role of the MSME sector as the backbone of the economy.
Airlangga Hartarto stated that the government’s commitment to deregulation and licensing simplification is the main foundation in creating a friendlier and more competitive investment climate globally.
In addition to domestic strategies, the government is also strengthening global risk mitigation measures. Tariff negotiations with the United States and the completion of Indonesia-European Union economic cooperation through the EU-CEPA continue to be actively carried out.
Indonesia’s membership in BRICS and the accession process to the OECD are clear evidence of the government’s seriousness in strengthening Indonesia’s position in the global economic arena. This will support long-term economic transformation towards the vision of Advanced Indonesia.
From the digital side, the Ministry of Investment and Downstream projects that the value of Indonesia’s digital economic investment will reach US$130 billion in 2025. This figure shows Indonesia’s dominance in Southeast Asia in this sector.
The Deputy for Climate Development and Investment at the Ministry, Riyatno, said that the digital economy sector is a top priority in attracting foreign investment. Digital ecosystems such as data centers are considered very potential.
Riyatno also emphasized the importance of collaboration between the government, industry sector, and academics in building a digital investment ecosystem. This synergy is considered important in driving innovation and accelerating national economic transformation.
