BI: Creative Financing Helps Regions Maintain Economic Growth
The Head of Bank Indonesia (BI) Representative Office for East Java Province, Ibrahim, has stated that creative financing schemes can help regional governments maintain economic growth amid ever-increasing investment needs. Ibrahim said creative financing is also an effort to diversify funding sources outside the Regional Budget (APBD) that regional governments can pursue.
“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, further underscoring the importance of diversifying funding sources outside the APBD,” he said in a statement in Surabaya on Wednesday (19/8/2026).
So far, Ibrahim said, Java’s economy continues to demonstrate resilience amid persistently high global uncertainty, growing 5.65 percent year-on-year, supported by household consumption, investment and government spending.
He said this growth momentum must be maintained, including through strengthening investment as one of the engines of economic growth, given its strategic role with a contribution reaching 29.68 percent to Java’s Gross Regional Domestic Product (GRDP).
Therefore, Ibrahim assessed the need for creative financing, including regional loans, Public-Private Partnerships (KPBU), regional bonds and sukuk, optimisation of regional assets, and blended finance schemes.
Meanwhile, a day earlier at the 2026 Coordination Meeting on Accelerating Investment and Regional Economic Growth for the Java Region in Surabaya, the Director General of Regional Financial Development at the Ministry of Home Affairs, Agus Fatoni, reminded that the use of creative financing must still be carried out by prioritising the precautionary principle, fiscal sustainability, good governance, and project readiness.
Agus stressed that expanding development financing sources must be accompanied by strengthening regional fiscal capacity and governance, taking into account regional financial capability, regulatory readiness, and institutional capacity.