In Order To Grow Optimally, Two Economic Machines Must Function Balanced

JAKARTA - The Government's target to encourage the national economy to grow above the level of 5-6 percent must be accompanied by the implementation of the right strategy in order to accelerate the sources supporting growth.

Chairman of the Board of Commissioners of the Deposit Insurance Corporation (LPS) Purbaya Yudhi Sadive when appearing as a keynote speech at the LPS Financial Festival in Surabaya, Thursday, August 7, said that the source that supports Indonesia's future economic growth is still from the domestic demand factor, namely consumption, investment or Gross Fixed Capital Formation (PMTB). The rest, from exports.

If you look at the data as of June 2025, consumption includes household consumption and government spending contributing 62.53 percent to Gross Domestic Product (GDP) then PMTB 27.83 percent. Thus, domestic demand is around 80-90 percent, while the rest is exports.

"Indonesia's economic strength comes from the large amount of domestic demand, therefore the two machines that power domestic potential must be optimized," said Purbaya.

According to Purbaya, in the last two decades, the national economy has grown by around 5-6 percent. In the era of President Susilo Bambang Yudhoyono (SBY), when commodity prices boom, economic growth was at the level of 6 percent. At that time, the private sector or private sector was more dominant in its role as an engine driving the economy. This caused the current government's debt to tend to decrease.

Meanwhile, in the era of President Joko Widodo (Jokowi) where high commodity prices had ended plus a period of the COVID-19 pandemic for several years, the economic engine was more dominantly driven by the Government, including to build infrastructure.

"In the last twenty years, we realize that our economic engine is always lame, one dead, one way, in the future we must run both of them so that the economy can grow higher," said Purbaya.

Despite the many challenges from externale such as geopolitical factors that cause uncertainty and other global economic policies, the Indonesian economy still has the potential to grow higher if two economic driving machines function in a balanced manner.

"Now there are programs from the Government such as Free Nutrition Food (MBG) and Red and White Cooperatives, this is to maintain stability and there must be, but don't forget the private sector," said Purbaya.

This can be done by encouraging banks to channel financing to economic sectors driven by the business world. This condition can run well, if optimism is created.

"Even if there are movements, our domestic strength is 80 percent, only 20 percent of exports, it's just a matter of how we are smart with all the domestic economic machines," said Purbaya. Regarding efforts to strengthen the domestic economy, the Mayor of Surabaya, Eri Cahyadi, who also spoke on that occasion said the Surabaya City Government (Pemkot) had a recipe for assembling economic resilience.

"We are trying to move around 2.8 million Micro, Small and Medium Enterprises (MSMEs) which have a turnover of around 188 billion rupiah," said Eri.

The municipal government, said Eri, has transformed the assets that are unemployed into places of business for the poor, such as being used as cafes, laundry and motorcycle washes.

"So the assets are unemployed not only for big entrepreneurs, but also for MSME players," he said.

With the optimization of these assets, it is hoped that more and more will dare to open a business, thus moving the local economy which automatically absorbs labor and increases people's income.