Coordinating Minister for Economic Affairs Airlangga Hartarto responded to the latest projection from the Organisation for Economic Co-operation and Development (OECD), which downgraded Indonesia’s economic growth forecast. In its latest release, the OECD predicted Indonesia’s economic growth would only reach 4.7% in 2025 and 4.8% in 2026. 

According to Airlangga, the government does not rely heavily on the OECD’s latest release. He stated that in the current unstable economic situation, the Indonesian government would focus on maintaining public purchasing power to support the national economy. 

“We are looking ahead at how we can maintain people’s purchasing power so we can sustain growth. One of the efforts was the launch of five stimulus packages, which are expected to support labor-intensive industries,” said Airlangga in a press conference broadcast live from France on Wednesday, June 4. 

The five stimulus measures issued by the government include discounts on transportation tickets, toll road tariff discounts, increased social and food aid, wage subsidy assistance, and the extension of discounts on Work Accident Insurance (JKK) contributions. Airlangga noted that similar steps are being taken by other OECD countries, which are also preparing policy packages to sustain domestic consumption. 

“Indeed, we are also monitoring various countries in the OECD, and most are also creating packages to maintain their people’s purchasing power under the current conditions,” said Airlangga. 

Furthermore, he explained that the economic slowdown is not only being experienced by Indonesia. A similar situation is occurring globally as a continued impact of U.S. trade policies and tighter global financial conditions. 

He mentioned that during a meeting with WTO Director-General Ngozi Okonjo-Iweala, discussions also touched on trade reductions resulting from tariff wars or reciprocal tariffs imposed by the United States. According to Airlangga, this situation is predicted to cut growth in several countries by 0.5% to 0.7%. 

Previously, in its latest Economic Outlook report, the OECD forecasted global economic growth to decline from 3.3% in 2024 to 2.9% in both 2025 and 2026. The organization also stated that key pressures stem from weakening market confidence, trade barriers, and high borrowing costs, which directly affect consumption and investment in many countries. 

This article is published in partnership with Katadata 

Original article here