Indonesia to launch economic stimulus to boost consumption

JAKARTA (Reuters) -Indonesia plans to announce economic stimulus measures on June 5 to revive activity and boost consumer purchasing power, hoping to push economic growth to around 5% this quarter, the Coordinating Ministry of Economic Affairs said on Saturday.

"These programmes are prepared to encourage growth by increasing consumption," chief economic minister Airlangga Hartarto said in a statement, adding that launching the measures before a school holiday starting in late June would provide momentum to boost purchasing power.

Southeast Asia's largest economy grew 4.87% in the first quarter from the same period last year, its weakest in more than three years. The central bank trimmed its 2025 growth forecast to between 4.6% and 5.4% from a 4.7%-5.5% range.

The ministry is still calculating the size of the stimulus package, which is meant to boost growth in the second and third quarters, a spokesperson said.

The incentives include a 50% discount on electricity bills for around 79.3 million households and food handouts for 18.3 million lower-income households in June and July.

The government also plans to give cash transfer for low-income workers and a discount on work accident insurance for workers in labour-intensive industries.

To boost tourism, the government said there will be discounts on airfare, train and sea transportation rates during the school holiday, which runs through mid-July, and discounts on highway tolls for 110 million users in June and July, the ministry said.

($1 = 16,215.0000 rupiah)

(Reporting by Bernadette Christina; Editing by William Mallard)

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