MACROECONOMICS
Government Announces Five Economic Stimulus Measures Worth IDR 24.44 Trillion
The government, through Finance Minister Sri Mulyani, announced five economic stimulus programs approved by President Prabowo to support purchasing power and maintain economic stability. The total stimulus, amounting to IDR 24.44 trillion, will be distributed during June – July 2025 and includes:
- Transportation Discounts: Ticket subsidies for trains, planes, and ships worth IDR 0.94 trillion.
- Toll Fee Discounts: 20% discount for 110 million toll road users, funded outside the state budget.
- Expanded Social Assistance: Additional IDR 200,000 in cash and 20 kg of rice for 18.3 million beneficiaries, with a total budget of IDR 11.93 trillion.
- Wage Subsidy Assistance: IDR 600,000 assistance for 17.3 million workers and 565,000 honorary teachers, totaling IDR 10.72 trillion.
- Occupational Accident Insurance Premium Discount: Contribution discounts for labor-intensive sector workers earning below IDR 3.5 million.
These measures aim to maintain Q2 2025 economic growth momentum near 5% and reduce poverty and unemployment.
– Kompas, June 2, 2025
Indonesia’s Manufacturing PMI Slightly Rises to 47.4 in May 2025, Still in Contraction
Indonesia’s manufacturing activity remained in contraction in May 2025, with the Purchasing Managers’ Index (PMI) edging up to 47.4 from 46.7 in April. Although still below the neutral threshold of 50, the improvement indicates a slower pace of decline.
New orders fell sharply, the steepest drop since August 2021 due to weak domestic and export demand, particularly from the U.S. As a result, production and purchasing activities were scaled back. However, employment continued to rise for the fifth time in the past six months, reflecting cautious optimism for recovery.
Input inflation surged due to rising raw material costs, but output inflation remained subdued as producers absorbed the costs and offered discounts to stimulate demand.
– Kontan, June 2, 2025
Indonesia Submits Initial Memorandum for OECD Accession
Coordinating Minister for Economic Affairs Airlangga Hartarto announced that Indonesia has officially submitted its Initial Memorandum, marking a significant milestone in its journey to become a full member of the Organisation for Economic Co-operation and Development (OECD).
The accession process began with President Joko Widodo’s letter of intent in 2023, followed by the approval of the accession roadmap in March 2024 and the formation of a National Accession Team. The submitted document covers 25 policy commitments and 32 policy areas for peer review (PAPs). Airlangga expressed confidence that full OECD membership could be achieved within the next four years.
– Bisnis, June 4, 2025
SECTORAL
Ministry of Energy Issues 2025–2034 Electricity Supply Plan (RUPTL)
Indonesia’s Ministry of Energy and Mineral Resources (ESDM) has released the 2025–2034 Electricity Supply Business Plan (RUPTL) targeting an additional 69.5 GW of power generation capacity. Minister Bahlil Lahadalia stated that 61% of the new capacity will come from renewable energy sources, including 17.1 GW of solar (PLTS), 11.7 GW of hydro (PLTA), 7.2 GW of wind (PLTB), 5.2 GW of geothermal (PLTP), 0.9 GW of bioenergy, and 0.5 GW of nuclear power. The remainder will be supplied by fossil fuels (24%) and energy storage systems such as batteries and pumped storage (15%).
The capacity expansion will be implemented in two phases: 27.9 GW in 2025–2029 and 41.6 GW in 2030–2034, with a greater share of renewables in the latter phase. The Java-Madura-Bali region will receive the largest allocation (33.5 GW), followed by Sumatra (15.1 GW) and Sulawesi (10.4 GW).
– Kontan, June 3, 2025
US$5 Billion in Foreign Investment Secured for 3 Million Homes Program
Vice Minister of Housing Fahri Hamzah announced that the Indonesian government has secured US$5 billion (approximately IDR 81.3 trillion) in foreign investment to support the 3 Million Homes Program. The funding comes from multilateral institutions such as the World Bank, ADB, AIIB, IsDB, and GIZ, and is currently being proposed for inclusion in Bappenas’ blue book of prioritized development projects.
Fahri emphasized that the program will begin to operate optimally in 2026, once President Prabowo’s administration’s state budget takes effect. In the meantime, central and local governments are being urged to prepare for absorbing the substantial funding allocated for the initiative.
– Kontan, June 3, 2025
Indonesia Aims to Become Top 5 Global EV Battery Producer by 2040
Indonesia’s Investment Coordinating Board (BKPM) has set a target for the country to become one of the world’s top five electric vehicle (EV) battery producers and the second-largest stainless steel producer by 2040. This ambition is driven by the ongoing nickel downstreaming strategy, with two processing pathways: High-Pressure Acid Leach (HPAL) for EV batteries and Rotary Kiln Electric Furnace (RKEF) for stainless steel.
Nickel sector investment potential is projected to reach US$127.9 billion by 2040, creating 357,000 jobs, contributing US$43.2 billion to GDP, and boosting exports by up to US$21 billion.
The target aligns with President Prabowo’s vision of achieving 8% economic growth and securing Rp 1,095 trillion in national investment by 2025. Since Indonesia’s 2020 ban on raw nickel ore exports, the country has attracted Rp 514.8 trillion in investments from 194 nickel companies.
– Kontan, June 2, 2025
CORPORATION
OJK Urges Regional Development Banks (BPD) to Launch IPOs to Boost Transparency and Fiscal Discipline
Indonesia’s Financial Services Authority (OJK) is encouraging Regional Development Banks (BPD) to go public through Initial Public Offerings (IPOs) as a means to enhance transparency, corporate governance, and fiscal discipline among local governments who are the majority shareholders. According to Dian Ediana Rae, OJK’s Chief Executive for Banking Supervision, IPOs combined with municipal bond issuances will strengthen oversight and strategic direction for BPDs.
Bank DKI is currently preparing for its IPO, backed by OJK and the Jakarta Provincial Government. Bank Jateng is also seen as a strong candidate for listing, with total assets reaching IDR 91.03 trillion as of Q1 2025. Dian highlighted that IPOs would provide access to long-term funding and present attractive opportunities for investors.
– Bisnis, June 4, 2025
BTN Acquires Bank Victoria Syariah for IDR 1.5 Trillion as Part of Sharia Unit Spin-Off
Bank Tabungan Negara (BTN) has acquired approximately 99% of Bank Victoria Syariah shares for IDR 1.5 trillion as part of the spin-off of its Sharia Business Unit (UUS). The acquisition has received approval from the President, the Ministry of State-Owned Enterprises, and Danantara.
The spin-off is targeted for completion by the end of 2025, with BTN Syariah expected to become a KBMI 2 Islamic Commercial Bank specializing in housing finance.
– Bisnis, June 5, 2025
BSI Prepares for Spin-Off from Bank Mandiri
PT Bank Syariah Indonesia Tbk. (BRIS) is entering a new phase with a planned spin-off from its parent company, PT Bank Mandiri (Persero) Tbk. (BMRI). State-Owned Enterprises Minister Erick Thohir stated that BSI will eventually be placed directly under the management of Indonesia’s Sovereign Wealth Fund, Danantara. The separation plan is still under review and falls primarily under Danantara’s initiative.
Currently, BSI is majority-owned by Bank Mandiri (51.47%), followed by BNI (23.24%) and BRI (15.38%), with the remaining 9.91% held by the public.
– Bisnis, June 3, 2025