Bandung. Coordinating Minister for Economic Affairs Airlangga Hartarto on Tuesday welcomed reports that Indonesia’s economy expanded by 5.12 percent in the second quarter of 2025, exceeding market expectations and signaling the country’s transition from post-pandemic recovery to sustained growth.

Speaking at the National Working Meeting of the Indonesian Employers Association (Apindo) at el Hotel in Bandung, Airlangga said the robust performance was fueled by rising household consumption, increased investment activity, and stronger collaboration between central and local governments and the business community.

“This growth is not just survival mode -- it’s real momentum,” he said. “Publicly listed companies, especially in retail, are showing stronger performance compared to the first half of the year. That’s proof our economy is on the move.”

He noted that several key sectors contributed to the growth, including agriculture, manufacturing, and e-commerce -- particularly in beauty and food & beverage categories.

To maintain this momentum, the government has implemented targeted stimulus policies. One of the key initiatives is a 100 percent value-added tax (VAT) exemption on residential properties priced under Rp 2 billion (approximately $124,000), aimed at boosting the real estate market and supporting related industries.

“Our goal is to ensure businesses keep operating, investing, and making a profit. We want the economy to grow -- not just hold steady,” Airlangga said.

He also addressed recent developments in Indonesia’s trade relationship with the United States. Following prolonged negotiations, the US has reduced import tariffs on Indonesian goods from 32 percent to 19 percent, placing Indonesia on par with regional peers like Malaysia and Thailand.

“If tariffs had stayed at 32 percent, up to five million Indonesian jobs could have been at risk,” Airlangga said.

To further stimulate consumption and investment, the government is rolling out a set of breakthrough economic policies. These include expanded access to microbusiness credit (KUR), a nationwide housing initiative to build 450,000 new homes, and a push to secure zero-percent export tariffs on Indonesian goods entering the European market under a future trade deal with the EU.

As the country prepares to celebrate its 80th Independence Day, the government will also launch a nationwide “Independence Discount” campaign, offering up to 80 percent off consumer goods to encourage household spending.

“This will be followed by a year-end stimulus program ahead of Christmas and New Year 2026,” Airlangga added.

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