Luhut Reveals Why Poverty Rose Despite 5% Economic Growth

National Economic Council (DEN) Chairman Luhut Binsar Pandjaitan has responded to President Prabowo Subianto’s remarks highlighting the phenomenon of rising poverty in Indonesia despite economic growth. Luhut assessed that the situation could be influenced by several factors, including price increases. He noted that the DEN has conducted calculations regarding the issue. “That could happen possibly because of price increases. We have the data, I don’t recall. The Economic Council has calculated that,” Luhut explained at his office in Central Jakarta on Wednesday (24/6/2026). He therefore expressed hope that the government can ensure various programmes run more efficiently, without any leakages. “If the economy is going to grow, that’s good. We must pay attention to efficiency. Efficiency is also the target of everything we do,” he said. He also highlighted Indonesia’s demographic bonus. According to Luhut, Indonesia does not have much time left to utilise the demographic bonus. He is confident the demographic bonus period will end within the next 10 years. “We must also truly realise together that the demographic bonus will be exhausted 10 years from now. So if we do not work properly, then achieving the 2045 vision will be difficult,” he stressed. He believes the Golden Indonesia 2045 target can still be achieved, provided the government, business sector, and the public can work cohesively. Furthermore, he stated that the use of technology in the government system can help improve efficiency while reducing corruption. “But if we are all united, I think there is no problem. Moreover, with government technology, it will certainly reduce corruption, and this technology is made by Indonesian children,” Luhut asserted. President Prabowo Subianto spoke about the anomaly in Indonesia’s economic growth. He observed that the growth occurring was not aligned with the improvement of people’s welfare. This was conveyed during the closing of the National Alim Ulama Conference and the Nahdlatul Ulama (NU) Grand Conference in Bangkalan, Madura, East Java, on Tuesday (23/6/2026). “It is said that over the last 7 years our economy grew 5% each year. 7 years times 5 means 35%, logically over 7 years Indonesia became 30% or 35% richer,” Prabowo said. However, he admitted he was shocked when, two months into his presidency, he received data contradicting the improvement in public welfare. In fact, the number of poor people had increased. “But the reality is, as I said, I felt stabbed when I became president. This data emerged, say, 2 months after becoming president. The reality is that after 7 years of 5% growth, how can the poor population increase? The country gets richer, the poor people increase. This is something strange, an anomaly. The middle class, which had previously escaped poverty, declined,” Prabowo said. “It is said the country became 35% richer, yet the poor increased, and the middle class decreased? And this is also what we must be wary of, that only a handful of people are getting richer,” he stated. According to him, an evaluation of the current economic system is necessary, especially if poverty figures rise and the middle class actually declines. This could mean that the economic growth over the past 7 years was only enjoyed by a small segment of society.