Jakarta. President Prabowo Subianto on Monday launched a sweeping economic stimulus package worth Rp 16.23 trillion ($1 billion) for the remainder of 2025, aiming to boost household consumption, ease business costs, and expand job creation.

The plan, dubbed the “8+4+5” package, outlines eight short-term acceleration programs to run through the end of 2025, four extensions in 2026, and five longer-term initiatives targeting labor absorption.

“This Rp 16 trillion allocation is for this year, and part of the funding has already been budgeted within ministries and other sectors,” Coordinating Economic Affairs Minister Airlangga Hartarto said in Jakarta after the cabinet meeting.

Job Programs and Social Aid

At the heart of the package is a focus on employment. The government will fund internships for 20,000 recent university graduates, who will be placed in industries for six months with stipends equivalent to the provincial minimum wage. The program carries a budget of Rp 198 billion.

In addition, the state will subsidize income tax (PPh 21) obligations for workers in hotels, tourism, and cafés, expanding a scheme that previously covered only labor-intensive industries. The expanded relief targets more than 552,000 workers and costs Rp 120 billion.

To protect vulnerable households, the government earmarked Rp 7 trillion for food aid, providing 10 kilograms of rice per family for two months in October and November. The program may be extended to December depending on fiscal space.

“We will evaluate the continuation in December,” Airlangga said.

Relief for Gig Economy and Housing

The government also plans to ease costs for informal workers such as ride-hailing drivers, couriers, and logistics workers by subsidizing 50 percent of premiums for workplace accident and death insurance (JKK and JKM) for six months. The Rp 36 billion scheme will cover more than 731,000 people.

To address housing affordability, authorities will provide 1,050 subsidized mortgage units through state insurer BPJS Ketenagakerjaan with lower interest rates. Beneficiaries will receive a relaxation in mortgage interest capped at Bank Indonesia’s policy rate plus 3 percent, down from the previous BI rate plus 5 percent. Developers will also benefit from cheaper financing. The state has allocated Rp 150 billion for the program.

“This year the target is 1,050 homes, and it will be expanded next year in support of President Prabowo’s three-million-home program,” Airlangga said.

Infrastructure, Urban Renewal, and Deregulation

Two infrastructure-linked initiatives are also included. The Transportation Ministry and the Public Works Ministry will run cash-for-work programs worth Rp 5.3 trillion to create jobs while upgrading transport and housing infrastructure.

Separately, Rp 2.7 trillion has been set aside for an urban renewal pilot in Jakarta, aimed at upgrading settlements and providing marketing platforms for small businesses. The program will later expand to West Java, Central Java, East Java, Banten, Bali, Manado, Makassar, and Batam.

The government will also push regulatory reforms through the implementation of Government Regulation No. 28/2025, with Rp 175 billion allocated to speed up permitting and ease investment bottlenecks.

The package extends into 2026 with four continued programs: final income tax relief for micro, small, and medium enterprises (MSMEs); extended PPh 21 subsidies for tourism and labor-intensive industries; and premium discounts for workplace insurance.

Longer term, five initiatives will target labor absorption, including operating village cooperatives, replanting smallholder plantations, developing coastal fishing villages, revitalizing ponds in Java’s northern coast, and modernizing fishing vessels.

“We hope this package can support purchasing power and help industries maintain competitiveness,” Airlangga said.

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