Economist: Semester II stimulus can maintain public purchasing power

Jakarta (ANTARA) - Trimegah Sekuritas Indonesia Chief Economist Fakhrul Fulvian assessed that the government’s Rp26.34 trillion stimulus package is a constructive step in maintaining public purchasing power amid global economic uncertainty. The composition of the stimulus, which focuses on food aid, transport incentives, and internship and vocational programmes, shows that the government understands the importance of sustaining household consumption and strengthening the labour market. “This package shows that the government is paying attention to the condition of Indonesian households. In a situation of high global uncertainty, maintaining people’s purchasing power is very important because household consumption remains the backbone of Indonesia’s economic growth,” Fakhrul said in Jakarta on Tuesday. He assessed that food aid for vulnerable groups will have a direct impact on the consumption of low-income communities, while internship and vocational programmes can help groups affected by the slowdown in economic activity and changes in the labour market structure. However, fiscal stimulus is fundamentally a short-term instrument to maintain economic momentum and cannot be the sole source of national economic growth. “Stimulus can help sustain growth over the next few quarters, but ultimately it only buys time. Sustainable economic growth still requires investment, the creation of productive jobs, and increased national productivity,” he explained. According to Fakhrul, the effectiveness of the stimulus will be greater if accompanied by efforts to strengthen macroeconomic stability and increase the confidence of business actors and investors in the direction of national economic policy. “The Indonesian economy currently needs a combination of protection for people’s purchasing power and strengthening market confidence. Households need consumption support, while the business world needs certainty to resume expansion and investment,” he said. Furthermore, Fakhrul suggested that the government use the stimulus as a bridge towards a broader economic reform agenda, particularly in strengthening the quality of growth and improving economic actors’ expectations. “Going forward, the government needs to continue gradual fiscal normalisation efforts, provide clarity on the direction of medium-term economic policy, strengthen fiscal and monetary coordination, and ensure that various national strategic programmes have credible and sustainable designs. These steps will help restore investor confidence, strengthen the rupiah exchange rate, and encourage greater investment,” he said. Fakhrul added that amid dynamic global challenges, Indonesia’s ability to maintain economic stability will be as important as its ability to drive growth. “Strong economic growth is born not only from stimulus, but also from confidence. When households are confident to spend, companies are confident to invest, and investors are confident in the policy direction, higher growth will be created sustainably,” he said.