BI: Creative financing helps regions maintain economic growth
Surabaya, East Java (ANTARA) - The Head of Bank Indonesia (BI) Representative Office for East Java Province, Ibrahim, stated that creative financing schemes can help regional governments maintain economic growth amid ever-increasing investment needs.
Ibrahim said that creative financing is also an effort to diversify funding sources outside the Regional Revenue and Expenditure Budget (APBD) that regional governments can undertake.
“Amid ever-increasing investment needs, the capacity for regional development financing faces challenges in line with the dynamics of fiscal space and transfers to regions, thus further emphasising the importance of diversifying funding sources outside the APBD,” he said in a statement in Surabaya on Wednesday.
So far, Ibrahim said, the economy of Java continues to show resilience amid still-high global uncertainty, namely being able to grow 5.65 percent (yoy), supported by household consumption, investment, and government spending.
He said this growth momentum needs to be maintained, one of which is through strengthening investment as one of the engines of economic growth because it has a strategic role with a contribution reaching 29.68 percent to Java’s GRDP.
Therefore, Ibrahim assessed the need for creative financing, including regional loans, Public-Private Partnerships (PPP), regional bonds and sukuk, optimisation of regional assets, and blended finance schemes.
Meanwhile, a day earlier at the 2026 Java Regional Investment and Economic Growth Acceleration Coordination Meeting in Surabaya, the Director General of Regional Financial Development at the Ministry of Home Affairs, Agus Fatoni, reminded that the use of creative financing still needs to be carried out by prioritising the precautionary principle, fiscal sustainability, good governance, and project readiness.
Agus emphasised that expanding development financing sources needs to be accompanied by strengthening the fiscal capacity and governance of regional governments by considering regional financial capability, regulatory readiness, and institutions.
Meanwhile, the Director of Strategic and Innovative Financing at Bappenas, Novie Andriani, said that various creative financing schemes are already available and permitted by regulation, but their implementation still faces challenges such as institutional readiness and the human resource capacity of regional governments.
In supporting the improvement of this readiness, Bappenas is also encouraging the strengthening of regional government capacity, including through capacity building programmes in the field of Public-Private Partnerships.
Assistant Deputy at the Coordinating Ministry for Economic Affairs, Yuli Sri Wilanti, added that creative financing is expected to accelerate infrastructure provision, improve connectivity, and open greater space for business entity involvement in supporting the development of leading sectors.
“Ultimately this will encourage the creation of new sources of economic growth in the regions,” said Yuli.
The coordination meeting held in Surabaya was part of a series of strategic forums for the Road to Java Regional Economic Forum (JREF) 2026.
The meeting focused on strengthening central and regional synergy to explore creative financing outside the APBD in order to encourage inclusive and sustainable investment.