Government Rolls Out Stimulus Measures to Support Q4 2026 Growth

Jakarta: The Indonesian government is preparing several economic stimulus policies for the fourth quarter of 2026, focusing on protecting people's purchasing power, expanding job opportunities, and sustaining the business sector.

"We are committed to ensure an inclusive economic recovery by strengthening social protection, while simultaneously boosting productivity in the real sector. Various follow-up programmes for the fourth quarter of 2026 and 2027 are designed to maintain purchasing power, strengthen worker competitiveness, and support the sustainability of the business sector," a Coordinating Ministry for Economic Affairs' Spokesperson, Haryo Limanseto, said in a statement on Monday.

Limanseto informed the government is preparing bank accounts for all citizens aged 17 and over, focusing on those in deciles 1 to 4.

In maintaining food security, the government distributed 10 kilograms of rice per month in October to December period, worth Rp17.5 trillion (USD951 million), for 33,244,408 beneficiary families (KPM) in deciles 1 to 4.

In the employment sector, worker protection was also strengthened through a three-month Wage Subsidy Assistance (BSU) programme of Rp300,000 (USD16) per month for 13.3 million workers, with a budget of Rp12 trillion (USD652 million).

Entering 2027, the government continued the internship programme for 150,000 participants and vocational training for 300,000 people, Limanseto added.

Meanwhile, the reduction in Article 21 Income Tax for workers earning under Rp10 million (USD543) per month was expanded to all sectors for 7.5 million workers. Discussions were held with the Ministry of Finance regarding adjustments to non-taxable income (PTKP).

Furthermore, in the housing sector, the Value Added Tax Borne by the Government (VAT DTP) facility was extended until 2027 for houses worth up to Rp2 billion (USD108 thousand), as well as VAT DTP on the price portion of up to Rp2 billion for houses valued up to Rp5 billion (USD271 thousand).

The government is also preparing subsidised mortgages with a 6 percent interest rate for those with fixed incomes of around Rp17 million (USD924) for houses worth up to Rp500 million (USD27 thousand).

In the employment sector, discounts on work accident insurance (JKK) and death insurance (JKM) contributions for non-wage workers will continue in 2027, while the use of job loss insurance (JKP) for six months will be adjusted based on income scale.

In the jewelry industry, the government is developing new VAT standards for 99.9 percent precious metals to facilitate the use of fiscal facilities.

Limanseto said the policy mix demonstrates the government's commitment to protect vulnerable groups while supporting growth in key economic sectors.

"The Ministry of Finance is reviewing a temporary budget allocation of around Rp31 trillion (USD1,6 billion) to ensure these programs can be implemented promptly and support the 2027 economic growth target," he remarked.

The priority programmes were agreed upon at a coordination meeting at the State Palace chaired by President Prabowo Subianto, Coordinating Minister for Economic Affairs Airlangga Hartarto, Finance Minister Suahasil Nazara, and heads of relevant ministries and agencies.