The Indonesian government is gearing up to stimulate the national economy in preparation for the upcoming Idulfitri holiday. With positive economic indicators and solid growth in 2024, officials are implementing a series of policies aimed at boosting consumer demand and supply during the festive season.

In 2024, Indonesia's economy showed impressive resilience, achieving GDP growth of 5.03% year-on-year. Key provinces, such as Papua Barat and Maluku Utara, saw remarkable growth rates of 20.8% and 13.73%, respectively, driven by industrial processing and mining sectors. Economic confidence remains high, with the Consumer Confidence Index (IKK) at a strong level of 126.4 in February 2025 and continued expansion in the manufacturing sector, with the Purchasing Managers' Index (PMI) standing at 53.6. Inflation remains well under control, with a slight deflation of 0.48% month-on-month (mtm), aided by electricity tariff discounts.

In his keynote speech at the Nusantara Economic Outlook (NEO) 2025 event on March 14, Indonesia's Coordinating Minister for Economic Affairs emphasized the government's commitment to supporting economic growth during the first quarter of 2025, particularly during the Idulfitri holiday period. "We are focused on driving both demand and supply to help push the economy during the Lebaran holiday period," he stated.

Several key initiatives are being implemented to support economic activity, including tourism incentives during the holiday period. With 122.1 million expected domestic tourist trips, the government is offering a range of incentives to stimulate spending. This includes a 6% increase in the Value Added Tax (VAT) discount for transport tickets, and a 20% discount on toll road fees for long-distance travelers during the period from seven days before to eight days after Idulfitri.

Additionally, the government has introduced incentives to support the electric vehicle (EV) market, providing a Rp7 million subsidy per electric motorcycle. Public sector workers and pensioners will also receive their religious holiday bonuses (THR) two weeks before Idulfitri, ensuring they have the necessary funds to support their families during this period.

For the private sector, the government has introduced initiatives like the "Friday Mubarak" program, which runs from February 28 to March 28, aiming to reach a transaction target of Rp75-77 trillion. Furthermore, the "BINA Lebaran" program from March 14 to 30, 2025, targets a transaction volume of Rp30 trillion, and online shopping campaigns during Ramadan are expected to further boost the retail sector.

Despite global economic uncertainties, such as rising recession risks in countries like Mexico, Canada, and the United States, Indonesia remains in a strong position. According to Bloomberg data in February 2025, Indonesia's risk of recession stands at less than 5%, significantly lower than other countries like Mexico (38%) and the United States (25%). Indonesia's economic stability is supported by strong foundations, trade diversification, and ongoing industrial downstreaming efforts.

"In the face of these global challenges, Indonesia's economy is well-positioned to maintain its stability and competitiveness. By continuing to strengthen economic fundamentals, Indonesia is poised for sustainable growth in the years to come," said Minister Airlangga.

As Indonesia prepares for the holiday season, these policies are expected to provide a much-needed boost to the nation's economy, benefiting various sectors including tourism, transportation, and retail. The government's proactive approach reflects its commitment to ensuring that Indonesia continues to thrive amid global uncertainties.

PHOTO: OKEZONE

This article was created with AI assistance.