The Indonesian government has set a target of achieving 6 percent\neconomic growth in 2027,Jakarta (ANTARA) - Maintaining people\u2019s\npurchasing power is a key priority for the Indonesian government as 2026\ndraws to a close, prompting economic policies that go beyond simply\nsupporting consumer spending.<\/p>\n
Looking ahead to 2027, the government is preparing sustainable\npolicies designed to transform social assistance from a safety net into\na driver of economic empowerment.<\/p>\n
Coordinating Minister for Economic Affairs Airlangga Hartarto has\nannounced several stimulus programs for the fourth quarter of 2026,\nincluding 10-kilogram rice assistance for 33.24 million beneficiaries\nand a monthly wage subsidy of Rp300,000 (around US$16.77) for 13.3\nmillion workers.<\/p>\n
The government is also preparing to open bank accounts for citizens\naged 17 and above, with a focus on people living in poverty and those\nvulnerable to it.<\/p>\n
Together, these three initiatives signal a shift toward combining\nsocial protection with broader financial inclusion. Looking ahead to\n2027, the government\u2019s economic agenda will expand further.<\/p>\n
The purchasing power cushion provided at the end of 2026 does not\nstand alone; it is designed to build momentum when linked with broader\ninitiatives spanning employment, skills training, workers\u2019 protection,\ntaxation, and housing.<\/p>\n
In 2027, the government plans to continue its internship program for\n150,000 participants and provide vocational training for 300,000 people.\nTogether, these programs aim to address key labor market challenges,\nincluding unemployment.<\/p>\n
Beyond supporting people facing economic pressures, the government\nalso needs to strengthen their ability to compete in the job market by\nequipping them with skills that meet industry demands.<\/p>\n
On the income front, the government is preparing an income tax\nreduction for workers earning less than Rp10 million (around US$559) per\nmonth, a measure expected to benefit approximately 7.5 million people.\nAn adjustment to the tax-free income threshold is also on the\nagenda.<\/p>\n
Tax policy is therefore being considered not only as a means of\ngenerating state revenue but also as a tool to support household\nspending. Under this policy package, allowing workers to retain more of\ntheir income is intended to boost disposable income and stimulate\nconsumption.<\/p>\n
Relief also extends to the housing sector. The government is\npreparing to expand its government-borne Value-Added Tax (VAT) incentive\nfor housing, alongside a subsidized mortgage program offering a fixed\ninterest rate of 6 percent.<\/p>\n
The 6 percent fixed-rate mortgage is intended for fixed-income\nearners making up to Rp17 million per month who are purchasing homes\npriced at up to Rp500 million.<\/p>\n
The measure would broaden access to homeownership for middle-income\nbuyers whose monthly earnings exceed the Rp14 million income ceiling for\nthe 5 percent interest rate under the Housing Financing Liquidity\nFacility (FLPP) scheme.<\/p>\n
For households, homeownership meets a fundamental need while\nproviding a foundation for long-term wealth building. For the wider\neconomy, the housing sector is a key growth driver, stimulating demand\nacross construction, building materials, finance, labor, and related\nsupply chains.<\/p>\n
Workforce protection<\/p>\n
Worker protection is also part of the government\u2019s agenda. It is\nplanning to extend workplace injury insurance and death benefits to\ninformal workers, alongside adjustments to job loss insurance\nbenefits.<\/p>\n
These measures are intended to ensure that workers do not have to\nbear the financial burden of losing their income alone.<\/p>\n
Taken together, these policies signal a strategic shift from\ncushioning immediate consumption toward strengthening people\u2019s long-term\nearning capacity.<\/p>\n
While food assistance and wage subsidies provide short-term relief,\nvocational training, internships, tax incentives, housing support, and\nsocial security are intended to establish a more resilient foundation\nfor future economic growth.<\/p>\n
This approach aligns with the growth framework outlined by Airlangga\nahead of the drafting of the 2027 economic agenda.<\/p>\n
The Indonesian government has set a target of achieving 6 percent\neconomic growth in 2027, identifying investment, higher productivity,\nhuman capital development, and value-added exports as key\nprerequisites.<\/p>\n
Under this framework, citizens are not viewed merely as passive\nrecipients of assistance. Instead, they are positioned as active\ncontributors to national economic growth through employment,\nconsumption, skills development, and productivity.<\/p>\n
Data from Statistics Indonesia (BPS) shows that the economy grew 5.29\npercent year-on-year in the second quarter of 2026. Inflation stood at\n3.28 percent year-on-year in September, remaining within the national\ntarget range. Meanwhile, exports reached US$193.64 billion from January\nthrough August 2026, generating a trade surplus of US$7.25 billion.<\/p>\n
In the manufacturing sector, Indonesia\u2019s Purchasing Managers\u2019 Index\n(PMI) returned to expansionary territory in September, reaching 52.4\nafter falling to 49.8 in August. The rebound provides a backdrop for the\ngovernment to move beyond consumption support and focus on strengthening\nthe production side of the economy.<\/p>\n
Meanwhile, Bank Indonesia recorded year-on-year growth of 13.65\npercent in bank lending in August 2026, driven by a 25.11 percent surge\nin investment loans. The expansion in investment financing aligns with\ngovernment efforts to increase production capacity and capital\ninvestment.<\/p>\n
Under the 2027 state budget, the government has earmarked Rp4,106.3\ntrillion in state spending and projected a budget deficit of 2.4 percent\nof GDP, alongside its 6 percent economic growth target.<\/p>\n
Budget priorities include food, energy, education, healthcare,\ndownstreaming and industrialization, infrastructure, housing,\ncommunity-based economic development, and poverty reduction.<\/p>\n
The stimulus package announced in late September forms part of a\nbroader, long-term strategy.<\/p>\n
The government is introducing protective measures to cushion the\npublic against short-term pressures on purchasing power while laying the\ngroundwork for stronger earnings, productivity, investment, and output\nover the longer term.<\/p>\n
Achieving stronger growth requires better coordination among skilled\nworkers, investing businesses, industries that generate added value, and\nmarkets capable of absorbing increased output.<\/p>\n
Under this approach, economic support serves as a starting point\nrather than an end in itself. While policies introduced in late 2026 aim\nto safeguard households\u2019 economic stability, the 2027 agenda seeks to\nunlock broader economic momentum through higher productivity, stronger\ninvestment, and higher-value production.<\/p>\n
Related news: Indonesia strives to shield middle class from economic\ndecline<\/p>\n
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