The Head of the Macroeconomics and Finance Centre at the Institute\nfor Development of Economics and Finance (Indef), M. Rizal\nTaufikurahman, stated that the economic stimulus of Rp26.34 trillion for\nthe second half of the year can serve as a buffer to prevent a slowdown\nin consumption.<\/p>\n
In general, he noted that the economic stimulus provided by the\ngovernment will help maintain household consumption, particularly for\nlow-income groups, through food assistance, transport discounts, and\nvocational programmes.<\/p>\n
\u201cHowever, in nominal terms, the value is less than 0.1 percent of\nGDP, so its impact functions more as a shock absorber to prevent a\nslowdown in consumption, rather than being the main driver of economic\ngrowth,\u201d Rizal said when contacted in Jakarta on Tuesday.<\/p>\n
He explained that current consumption challenges are more structural.\nThe increase in the BI-Rate to 5.75 percent, rising living costs, and\nthe slowing purchasing power of the middle class have made households\nmore cautious in their spending.<\/p>\n
The Consumer Confidence Index in May 2026 also fell to 120.9 from 123\nin April, indicating that public optimism is beginning to weaken.<\/p>\n
\u201cIn this condition, the stimulus helps maintain basic consumption,\nbut it is not yet strong enough to drive a surge in demand,\u201d he\nsaid.<\/p>\n
Nevertheless, Rizal predicts that household consumption in the second\nhalf of 2026 will continue to grow positively and remain the main pillar\nof the economy, even if the pace tends to be moderate.<\/p>\n
According to him, the most decisive factors are the labour market\nconditions, real income growth, food inflation, and energy price\nstability. If employment and income do not improve, the scope for\nconsumption growth will remain limited.<\/p>\n
Given these conditions, Rizal believes the current stimulus is\nsufficient to ensure the economic growth target does not weaken further,\nbut it is not yet a game changer.<\/p>\n
\u201cThe government needs to strengthen this through job creation,\naccelerated investment, the strengthening of labour-intensive\nindustries, and support for MSMEs so that public purchasing power\nincreases sustainably, rather than relying solely on temporary aid,\u201d\nRizal added.<\/p>\n
The government has prepared an economic stimulus package for the\nsecond half of 2026 with a total budget of Rp26.34 trillion.<\/p>\n
Specifically, the stimulus includes approximately Rp2.04 trillion for\ntransport incentives, around Rp6.26 trillion for internship and\nvocational programmes, and Rp18.04 trillion for food assistance.<\/p>\n
Coordinating Minister for Economic Affairs Airlangga Hartarto, in a\npress conference in Jakarta on Monday (23\/6), detailed that one of the\nstimuli provided by the government is the setting of a 1.5 percent final\nIncome Tax (PPh) rate on royalties for authors.<\/p>\n
The government is also providing various transport discount\nincentives during the school holiday and Christmas\/New Year (Nataru)\nperiods.<\/p>\n
For the school holidays, the government is providing a 30 percent\ndiscount on train tickets from 20 June to 5 July 2026, a 30 percent\ndiscount on basic ship fares from 20 June to 15 August 2026, and an\nexemption from ASDP port service fees from 20 June to 5 July 2026.<\/p>\n
Additionally, the government is providing a 100 percent VAT borne by\nthe Government (PPN DTP) incentive for domestic economy-class air\ntickets.<\/p>\n
For the Christmas and New Year period, the government will provide a\n30 percent discount on train tickets from 22 December 2026 to 4 January\n2027, a 30 percent discount on basic ship fares from 17 December 2026 to\n10 January 2027, and an exemption from ASDP port service fees from 22\nDecember 2026 to 10 January 2027.<\/p>\n
The 100 percent PPN DTP incentive will also be reapplied to\neconomy-class air tickets.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/economist-stimulus-acts-as-shock-absorber-to-cushion-consumption-slowdown-1782208810", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }