Jakarta. Indonesia risks capping its economic growth unless policymakers expand the country’s monetary space, an economist said at a discussion hosted by B-Universe Media Holdings on Wednesday.

Presidential Communications Office adviser Fithra Faisal highlighted that Indonesia’s broad money (M2) to GDP ratio is only 44 percent, significantly lower than Vietnam’s 164 percent, which limits the capacity of banks to channel credit into productive sectors.

“Vietnam can sustain 8 percent growth because its monetary room is far wider,” Fithra said. “Indonesia must increase base money so banks have more flexibility in lending.”

The government recently injected Rp 200 trillion ($12.2 billion) into five state-owned banks to boost lending: Bank Mandiri, BRI, and BNI each received Rp 55 trillion, BTN Rp 25 trillion, and BSI Rp 10 trillion. While this liquidity is welcome, Fithra cautioned that stimulus alone is insufficient without reforms to ensure funds reach the real economy.

He pointed to Japan’s Abenomics strategy as a model, which combines monetary easing, fiscal stimulus, and social transmission. While Indonesia has implemented lower interest rates and fiscal support, Fithra said improving the business climate through deregulation and other structural reforms remains crucial.

“Without social transmission, stimulus and liquidity cannot fully translate into growth above 5 percent,” he said.

Finance Minister Purbaya Yudhi Sadewa has also flagged concerns over Indonesia’s low base money, reinforcing calls to expand the country’s monetary toolkit and strengthen policy channels to support banks and businesses.

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