Anastasya Lavenia Y, Jakarta – Faculty of Economics and Business lecturer at Gadjah Mada University, Wisnu Nugroho, questions the long-term effectiveness of the six economic stimulus packages to be launched by President Prabowo Subianto on June 5, 2025. These stimulus packages include discounts on electricity tariffs, toll tariffs, and wage subsidies.

"This policy is appropriate as a short-term emergency measure but not as a long-term economic recovery strategy," said Wisnu to Tempo on Saturday, May 31, 2025. In the short term, he said, this step could boost household consumption in the second quarter, especially coinciding with school holidays and the disbursement of the 13th salary for civil servants.

Wisnu detailed three reasons why this policy may not be effective in the long term. First, this policy lacks a robust structural design. Second, this policy does not directly target the sluggish productive sectors, such as the manufacturing industry. Third, there is no clarity about the multiplier effects of each program. "(This policy) needs to be accompanied by structural reforms, state spending efficiency, and a push for investment in the real sector," said Wisnu.

Secretary of the Coordinating Ministry for the Economy, Susiwijono Moegiarso, said This policy aims to achieve 5 percent economic growth by the second quarter of 2025. "It's not just to boost purchasing power. The main goal is to stimulate economic growth in the second quarter," said Susiwijono Moegiarso, as quoted on Monday, May 26, 2025.

In the first quarter of 2025, the Indonesian economy only grew by 4.87 percent, slowing down compared to the fourth quarter of 2024 at 5.03 percent or the first quarter of 2024 at 5.11 percent. According to Susiwijono, the momentum that drives growth, such as Eid al-Fitr, has shifted to the first quarter of 2025 and the early second quarter of 2025. Therefore, the government is using the school holidays to stimulate growth.

The first stimulus package provided is a discount on transportation during the school holiday period. This includes a 30 percent discount for train tickets, a 6 percent discount on a flight ticket including the government-paid value-added tax (PPN DTP), and a 50 percent discount on sea transportation tariffs.

Secondly, the government will provide a 20 percent toll tariff reduction targeting around 110 million drivers, applicable in June-July 2025. Third is a 50 percent discount on electricity tariffs for customers using power below 1,300 volt-amperes (VA).

Fourth, the government will also increase the allocation of social assistance of a Rp200,000 monthly staple card and 10 kilograms of rice assistance targeting 18.3 million Beneficiary Families (KPM) for June-July 2025. Fifth, the government will provide Wage Subsidy Assistance (BSU) for workers with salaries below Rp3.5 million or regional minimum wage, as well as honorary teachers.

The sixth stimulus, the government will extend the 50 percent discount program for Work Accident Insurance (JKK) contributions for workers in labor-intensive sectors. This discount extension will be carried out for six months from August 2025 to January 2026.

– Ilona Estherina has contributed to the writing of this article

Source: https://en.tempo.co/read/2012795/scrutiny-grows-over-prabowos-economic-stimulus-pla