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Govt banks on consumer stimulus to reach 5% growth

The government has announced a new stimulus package to support consumer spending in the second quarter and lift GDP growth to 5 percent after a disappointing first quarter.

Deni Ghifari (The Jakarta Post)
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Mon, May 26, 2025 Published on May. 26, 2025 Published on 2025-05-26T16:41:20+07:00

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Govt banks on consumer stimulus to reach 5% growth Hazy days: Smog covers Jakarta on Aug. 9, 2019. (Antara/Aditya Pradana Putra)

T

he government has announced a new stimulus package to support consumer spending in the second quarter and lift gross domestic product (GDP) growth to 5 percent after a disappointing first quarter.

The initiative, unveiled by Coordinating Economic Minister Airlangga Hartarto on Friday, is to become effective on June 5 and last to the end of July, with some of the measures applying just during the school holidays.

“It is hoped that these economic stimuli can push economic growth in the second quarter. We’ll seize the moment and make some programs. Some of what we’ve prepared is intended to push growth through what can ramp up consumption,” Airlangga was quoted as saying in a press statement released on Saturday.

The stimulus measures cover six areas, one being transportation discounts for trains, airplanes and ships, another discounts on road tolls for some 110 million eligible drivers, according to the statement, which lacked further details.

Moreover, the package includes a 50-percent electricity discount for June and July, similar to what the government granted in January and February. However, the discount this time applies only to the 79.3 million households supplied with up to 1,300-volt ampere (VA) power, as opposed to 81.4 million households served with 2,200-VA power or lower.

The other three areas are social aid for 18.3 million beneficiaries, wage subsidies for low-income earners and a discount on work accident insurance for workers in labor-intensive industries.

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