Purchasing Power Increase Strategy Government Efforts to Strengthen the National Economy
By: Jodi Mahendra
The government continues to strive to maintain the momentum of economic growth amidst global pressure and uncertain geopolitical dynamics. In facing the second quarter of 2025, the main focus is directed at increasing people’s purchasing power as one of the foundations for the recovery and strengthening of the national economy. This step is in line with the ambitious target in the 2025–2029 National Medium-Term Development Plan (RPJMN), namely to achieve economic growth of 8% per year.
One of the government’s concrete strategies is to provide fiscal stimulus to encourage domestic consumption. In early 2025, the government rolled out a number of policies such as optimizing social assistance and disbursing Eid Allowances (THR) for State Civil Apparatus (ASN), which were disbursed earlier, namely in March 2025. This stimulus is expected to stimulate household consumption, especially at important moments such as Ramadan and Eid al-Fitr. Not only that, the government has also launched a free nutritious meal program (MBG) which has started since January 2025. This program targets vulnerable groups and students as part of efforts to strengthen the quality of human resources while driving the local economy through the food sector.
Coordinating Minister for Economic Affairs Airlangga Hartarto said that these strategies were designed as part of the orchestration of pro-growth fiscal and monetary policies. In addition, accelerating the realization of government spending including social assistance, THR, and food price subsidies so that public consumption is not eroded by inflationary pressures.
Furthermore, he also stated the importance of maintaining the purchasing power of the middle class, which is the main driving force of the Indonesian economy. In addition, the government also continues to expand access to education and health for the community through the Smart Indonesia Card and National Health Insurance programs.
Previously, the Indonesian government targeted economic growth in 2025 of 8%. To support this achievement, the strategy implemented by the government focuses on strengthening people’s purchasing power, strengthening the real sector, and creating a more productive and efficient business climate. In the second quarter of 2025, the government will continue the fiscal stimulus policy that has been implemented since the beginning of the year, especially through the acceleration of state spending realization, social assistance programs, and support for public consumption. This stimulus aims to maintain purchasing power amidst global challenges and economic uncertainty.
One of the main focuses is the acceleration of spending realization of ministries and institutions, especially those that have a direct impact on the community and productive activities. The government is also maximizing social protection programs such as food assistance, energy subsidies, and education assistance. In addition, to maintain the momentum of post-Eid consumption, various trade promotion programs and fiscal relaxation are still in effect. The government also continues to encourage the distribution of People’s Business Credit (KUR) and ultra-micro financing as a form of concrete support for MSMEs who are the backbone of the national economy.
The government also places industrialization and downstreaming as the main pillars of medium-term economic growth. Superior natural resources such as nickel, copper, palm oil, and seaweed are the focus of development through industrial areas and Special Economic Zones (KEK). By increasing added value domestically, the government hopes to strengthen the competitiveness of Indonesian products in the international market and create new jobs.
Another equally strategic step is regulatory reform. The government has launched Government Regulation (PP) Number 8 of 2025 concerning Export Proceeds (DHE) which requires exporters to keep 100% of their export proceeds domestically for a minimum of 12 months. This policy is intended to maintain exchange rate stability and strengthen foreign exchange reserves.
Not only focusing on the domestic market, the government is also strengthening international cooperation. Indonesia is currently finalizing negotiations on a free trade agreement with the European Union (EU-CEPA), as well as strengthening its position in international forums such as BRICS and OECD. This step shows Indonesia’s seriousness in expanding its export market, attracting foreign investment, and adopting global governance standards.
Overall, the government’s strategy to increase purchasing power does not stand alone. This strategy is part of the government’s holistic approach to strengthening the foundation of the national economy through consumption, investment, exports, and sustainable structural transformation.
