Economist: Investment Starts Moving, But Demand Is Still Weak

JAKARTA - Senior Economist of Indef, Aviliani assessed that although the number of new issuers in the capital market is not too large, the capital market contribution remains significant because many conglomerates are now choosing expansion through capital market instruments.

"The capital market contribution is also quite large, especially conglomeration companies currently tend via capital market financing," he said in the 2026 Indonesian National Economic Projection Seminar virtually, Thursday, November 20.

Aviliani said that the bank's contribution remained dominant in supporting financing. The disbursement of Rp200 trillion in funds provided by the government previously made interest rates drop and immediately pushed for credit demand.

Furthermore, he said earlier because interest was expensive, credit growth was only 7 percent. Now demand from the banking side has increased.

"The impact of lower interest rates will indeed increase. People also tend to look for alternatives, marked by the stock price index which immediately rises," he said.

However, Aviliani emphasized that the financing improvement was not enough. Demand from the public and the real sector has not moved because sectoral policies are considered not to actively encourage increased consumption or economic activity.

"It is not optimal because contributions from sectoral ministries do not provide policies that make the demand from sectoral increase," he said.

Aviliani emphasized that the tourism sector should be a priority because it is able to generate demand quickly and make a big contribution to MSMEs. The plane ticket discount that the government has begun to provide is considered the first step, but the tourism ecosystem in the regions must really be built.

"If people still have problems with purchasing power, then government should be concerned about the speed of economic growth from tourism which is the fastest growing. That must be done by the ecosystem. Currently starting from discounted plane ticket prices," he explained.

On the investment side, Aviliani said that downstreaming and manufacturing based on Special Economic Zones (KEK) are still in demand by investors. The Batang and Kendal areas, for example, are many points considered because the wages of workers in Central Java are still competitive.

"What investors are interested in is SEZ. Batang area is in the top because there is a Central Java SEZ in Kendal", he explained.

Aviliani said, the Central Java region is in demand because the wages of workers are still cheap. Government policies should pay attention to that. MSMEs and downstreaming also absorb the most workforce in the lower middle class who are having problems with income.

Behind these various opportunities, Aviliani assessed that the implementation of policies is still a major obstacle. He gave an example of licensing through OSS which according to business actors has not been effective.

"Now it's an SOS, it doesn't make it easy. A Regulation Task Force must be formed so that it can be resolved quickly if there is a problem," he said.

Aviliani added that policies cannot be uniformed. This is because each sector and region in Indonesia have different characteristics.

"Every policy cannot be generalized one for all, but must be based on sectoral policies typical of each region," said Aviliani.