JP Morgan's Economic Value Of The Republic Of Indonesia 2025 Can Be Boosted With A Stimulus Package

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JAKARTA - JP Morgan Indonesia CEO & Senior Country Officer Giovanni Ralie assessed that the fiscal stimulus package policy would boost Indonesia's economic performance throughout the remainder of 2025.

He assessed that market participants welcomed the stimulus package worth 1.5 billion US dollars or around Rp. 24 trillion which was announced by Finance Minister Sri Mulyani Indrawati on June 2, 2025.

"Subsidi seems to be focused on the general public, with a budget that is mostly allocated to programs such as additional social assistance and wage subsidies," said Giovanni quoting Antara. Gioza explained, there are several sectors that have the potential to benefit from this stimulus package, including the basic consumption goods sector, raw materials, discresioner consumer goods, and property.

"The transportation discount can increase domestic travel demand, creating an increased risk for the hotel business," said Giovanni.

In addition to the stimulus package, he continued, several policies will boost national economic performance in the remainder of 2025, including trade agreements with partner countries and the relaxation of monetary policy by the central bank.

As is known, after going through the negotiation process, Indonesia succeeded in reducing the reciprocal tariff from US President Donald Trump to 19 percent from the previous 32 percent, which was accompanied by other agreements.

From a monetary perspective, BI has lowered its benchmark interest rate five times since September 2024, then continued in January, May, July, and August 2025 with 25 basis points (bps) each to date at the level of 5 percent.

"The attractive market valuation and strategic policies also provide bright prospects for certain sectors, such as consumer goods, property, and banking," said Giovanni.

Furthermore, Giovanni said that spending in the first semester of 2025 was recorded at only 40 percent of the budget target throughout 2025, which indicates an acceleration of spending in the second semester of 2025 and has the potential to support growth.

Not only that, the 2026 State Revenue and Expenditure Budget Draft (RAPBN) which was just announced helped strengthen this optimism, with a balance between growth and fiscal discipline.

"The 2026 budget has succeeded in maintaining a balance between fiscal discipline, government strategic program funding, long-term investment, and short-term needs to encourage public consumption," said Giovanni.