Economist: Fourth Quarter Stimulus Effective as Buffer for Purchasing Power
Jakarta (ANTARA) - Permata Bank Chief Economist Josua Pardede believes that the fiscal stimulus to be released by the government in the fourth quarter of 2026 will be effective as a buffer for public purchasing power.
“The fourth-quarter fiscal stimulus will be quite effective in preventing a decline in household consumption, but it is more accurately viewed as a buffer for purchasing power rather than a major driver of growth,” Josua stated when contacted by ANTARA in Jakarta on Monday.
According to Josua, the inflation rate in September 2026, which stood at 3.28 per cent, was largely influenced by rising food prices and supply-side factors.
He also highlighted that inflationary pressures primarily stem from food and energy prices, the weakening Rupiah, El Niño risks, and the rising cost of imported raw materials.
Under such conditions, Josua noted that the design of the fourth-quarter stimulus is relatively well-targeted, as it directly addresses the two components most critical to the consumption of lower and lower-middle income groups.
The government has prepared a 10kg monthly rice assistance programme from October to December for approximately 33.24 million families in deciles 1-4, with a budget of Rp17.5 trillion, as well as wage subsidy assistance (BSUS) of Rp300,000 per month for three months for 13.3 million workers, with a budget of nearly Rp12 trillion.
“Food assistance works by reducing household expenditure on basic necessities, allowing income to be redirected to other needs, whereas wage assistance directly increases disposable income,” Josua explained.
Nevertheless, he expects the stimulus to play a greater role in maintaining consumption levels rather than triggering a surge in consumption.
Its effectiveness also depends on price developments. If the prices of food, energy, and transport continue to rise, Josua argues that the additional income provided to the public risks being entirely absorbed by paying for the same goods at higher prices.
From a supply perspective, the increase in purchasing power must also be balanced with adequate food production and distribution to prevent renewed price pressures.
The speed of disbursement is also considered a crucial factor. If the assistance is distributed starting in October or early November, the impact on year-end consumption—including the period leading up to Christmas and New Year—is expected to be greater.
Conversely, delays in disbursement until late December could limit the stimulus’s impact on fourth-quarter growth.
Therefore, Josua believes the measure of success for this policy is not merely the total trillions of rupiah distributed, but whether the real consumption of the recipients is maintained without causing significant additional price pressures.
“With core inflation still under control, there is still room for targeted stimulus like this; the challenge is ensuring rapid distribution and sufficient food supply so that the stimulus is not simply exhausted by paying for price increases,” he concluded.