Fiscal Spending Drives Economic Growth in Line with National Target
Jakarta – The government continues to strengthen expansionary fiscal policy to maintain the momentum of national economic growth, ensuring it remains on track to achieve the 5 percent target throughout 2025. Several indicators show that, despite persistent global pressures, productive and well-targeted government spending policies have become a key pillar of national economic stability.
The Head of Macroeconomics and Finance at the Institute for Development of Economics and Finance (Indef), Muhammad Rizal Taufikurahman, predicts that Indonesia’s economic growth in the third quarter of 2025 will be in the range of 5.0–5.2 percent, a slight increase from the 5.12 percent achieved in the second quarter.
According to Rizal, this increase is not entirely due to the structural strength of the economy, but is supported more by fiscal stimulus and short-term consumption.
“The economy is growing because it is driven, not because it is strengthening. Expansive government spending and stable food prices do provide room for consumption, but the purchasing power of the lower-middle class has not fully recovered,” Rizal said.
He added that domestic consumption activity is currently driven more by government budget realization, while private investment remains cautious.
“Gross Fixed Capital Formation (PMTB) data has not shown a significant surge. The private sector is still holding back expansion due to global uncertainty and high lending rates. The engine of growth is still driven from above, not driven by market dynamics,” he explained.
The central government’s fiscal performance is considered successful in supporting economic stability in various regions. The Head of the Regional Office of the Directorate General of Treasury (DJPb) of South Kalimantan Province, Catur Ariyanto Widodo, stated that the distribution of Regional Transfers (TKD) in his region has shown stable, timely, and progressive results.
He stated that this positive performance is crucial for regional fiscal stability and supports improving the quality of public services throughout South Kalimantan.
“The realized fiscal incentives amounted to Rp113.73 billion, or 64.39 percent of the budget. These funds are provided as a token of appreciation to regions that demonstrate good performance in financial management and development. These incentives are expected to motivate regional governments to continue improving their performance,” said Catur.
He emphasized that with fiscal budget support from the central government, synergy between the central and regional governments can be strengthened in supporting inclusive and sustainable economic growth.
“With the support of the Regional Development Assistance (TKD), regional governments in South Kalimantan can improve the quality of public services, accelerate spending absorption, and strengthen regional fiscal resilience to encourage inclusive and sustainable economic growth,” he added.
Meanwhile, Gundy Cahyadi, Research Director of the Prasasti Center for Policy Studies (Prasasti), assessed that from a fiscal perspective, government spending realization until September 2025 had only reached 59.7 percent of the annual target, lower than the same period the previous year.
By: Sjaichul Anwari*
Indonesia’s dependence on fuel imports has not only burdened the state budget but also made energy security vulnerable to global volatility. In this context, renewable energy presents not only an environmentally friendly alternative, but also a strategic opportunity to reduce imports and accelerate energy self-sufficiency.
The government itself continues to strengthen measures to reduce dependence on imported energy, which has been deemed a burden on the country’s foreign exchange reserves. One key strategy currently being accelerated is the fuel blending policy, or the blending of fossil fuels with biofuel sources such as biodiesel and ethanol.
Minister of Energy and Mineral Resources (ESDM), Bahlil Lahadalia, emphasized that Indonesia’s energy imports currently reach IDR 520 trillion per year, a significant amount that has the potential to erode foreign exchange reserves. Therefore, the government considers the blending policy to be the most concrete step to reduce dependence on imports while strengthening national energy independence.
Bahlil stated that a budget of IDR 520 trillion per year to purchase energy raw materials from abroad actually enriches other countries. However, the government must not remain silent; energy policies must side with the people, not those who enjoy large margins from imports.
According to Bahlil, some business circles still want to maintain energy import practices because they profit from the current import quota system. These parties have become too comfortable with the system.
