Antara News·Indonesia·Friday, November 6, 2026 at 05:49 AM UTC

Indonesia's consumption growth relies on fiscal stimulus: Indef

Translate

Shofi A, Rahmad Nasution

Jakarta (ANTARA) - Government stimulus has helped sustain household consumption, Indonesia's biggest growth driver, as the economy expanded 5.47 percent in the third quarter, according to the Institute for Development of Economics and Finance (Indef).

Riza Annisa Pujarama, a researcher at Indef's Center for Macroeconomics and Finance, said subsidies and social assistance had helped preserve purchasing power, particularly among lower-income households.

“Indonesia has become increasingly reliant on government fiscal stimulus in 2025 and 2026. It is therefore unsurprising that household consumption has increased and remained resilient,” Riza said here Thursday.

Statistics Indonesia (BPS) reported that the economy grew 5.47 percent year on year in the third quarter, accelerating from 5.29 percent in the second quarter and 5.04 percent in the same period of 2025.

Household consumption remained the largest component of gross domestic product (GDP), accounting for 51.97 percent of the economy.

It expanded 5.04 percent year on year, contributing 2.62 percentage points to overall economic growth.

Riza said government support was also reflected in growth in government consumption expenditure on individuals, including subsidies and social assistance, which accelerated to 30.68 percent in the third quarter from 10.92 percent a year earlier.

For the fourth quarter, the government has prepared additional stimulus to support purchasing power, including 10 kilograms of rice monthly from October through December for 33.24 million beneficiary families.

A separate wage subsidy will provide 300,000 rupiah (about US$17) per month for three months to 13.3 million workers, with a budget of nearly 12 trillion rupiah (about US$662 million).

Riza urged the government to expand stimulus eligibility beyond lower-income households to include the middle class, which also faces rising prices for daily necessities and heavier tax burdens.

Supporting middle-income households is essential to preserving purchasing power and sustaining household consumption, a key driver of national economic growth, she said.

View the original on Antara News →

KioskNews shows a cleaned-up reading view extracted from the publisher’s page — the original always lives on their site, not ours.