The Indonesian government recently announced a bold economic package of fiscal incentives and social support aimed at easing household pressures, supporting small businesses, and stimulating growth. The plan includes food aid, internships for graduates, tax breaks for micro and small enterprises, and a 200 trillion rupiah ($11.9 billion) injection into state banks to fund cooperative lending.
While this package will offer short-term relief, questions remain about its long-term impact. Can it boost demand, attract investment, and build sustainable growth – or will it create new risks for Indonesia’s economy?
The package seems initially aimed at providing short-term relief for the Indonesian public. More than 18 million households will receive rice aid, graduates will gain access to 20,000 paid internships, and small businesses will enjoy a continued low tax rate. Cash-for-work programs are also expected to employ hundreds of thousands of people in infrastructure projects.
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