Government Readies $1.95 Billion Fourth-Quarter Economic Stimulus to Safeguard Purchasing Power

JAKARTA, Investortrust.id — President Prabowo Subianto is set to unleash an estimated Rp 31 trillion ($1.95 billion) economic stimulus package in the fourth quarter of 2026, rolling out aggressive social safety nets to protect household purchasing power and sustain domestic momentum.

The comprehensive plan was finalized during a limited cabinet meeting chaired by the President at the Presidential Palace complex in Jakarta on Wednesday, Sept. 30, 2026.

Private domestic consumption serves as the anchor of Southeast Asia’s largest economy, especially as global monetary tightening and external demand headwinds persist. By deploying nearly $2 billion across staple food deliveries, direct wage supplements, and middle-class tax relief before year-end, the government is looking to cushion low-income households from living costs while ensuring retail turnover remains buoyant heading into fiscal 2027.

Coordinating Minister for Economic Affairs Airlangga Hartarto said that Wednesday’s cabinet deliberations concentrated primarily on direct interventions for the fourth quarter.

"Today we held a meeting with the President regarding government assistance programs prepared for the fourth quarter," Airlangga told reporters following the session.

Rice Aid and Wage Subsidies Anchor the Budget

The largest single allocation within the fourth-quarter package is staple food assistance, requiring an estimated budget of Rp 17.5 trillion ($1.10 billion). Under this program, the government will provide a 10-kilogram rice allowance per month across October, November, and December, distributed in a single combined delivery to 33,244,408 beneficiary families situated in income deciles 1 through 4.

The administration will also revive the wage subsidy program (BSU) with an envelope of nearly Rp 12 trillion ($754.24 million). The initiative will cover 13.3 million formal workers, providing Rp 300,000 ($18.86) per month paid out in a lump sum covering three months, or Rp 900,000 ($56.57) per worker.

In addition, the administration is preparing automated bank account openings for citizens aged 17 and above belonging to deciles 1 through 4 to provide a direct digital conduit for public aid. Airlangga noted that the exact fiscal requirement for the onboarding scheme is currently being cross-checked by relevant line ministries.

Airlangga emphasized that the total headline figure remains subject to final administrative screening by Finance Minister Suahasil Nazara.

"The budget is being reviewed again by the Minister of Finance," Airlangga explained. "It is approximately Rp 31 trillion."

Policy Horizons for 2027

The cabinet meeting also laid out policy extensions intended to transition into 2027 across multiple frontline areas. Workforce development will see the Ministry of Manpower extend apprenticeship programs for 150,000 individuals alongside vocational training tracks for 300,000 participants.

Fiscal relief will expand significantly as personal income tax (PPh 21) exemptions for employees earning under Rp 10 million ($628) monthly—currently restricted to labor-intensive manufacturing and tourism—are rolled out nationwide across all sectors to benefit roughly 7.5 million workers. In tandem, fiscal authorities and Finance Minister Suahasil Nazara are recalibrating the non-taxable income threshold (PTKP) to track annual inflation benchmarks.

Housing and social safety nets will also see sustained support into the new fiscal year. Government-borne value-added tax (PPN DTP) exemptions for residential property purchases will remain active through 2027, granting full VAT relief on homes priced up to Rp 2 billion ($125,700) and providing a Rp 2 billion deduction for purchases valued up to Rp 5 billion ($314,250). At the same time, workplace accident (JKK) and death benefits (JKM) will broaden to cover informal, non-wage earners, while job loss security (JKP) cash benefits over six months will follow a tiered compensation formula anchored to past earnings.

Subsidized Mortgages and Jewelry Standards

The administration is introducing new stimulus programs, including a subsidized home ownership loan (KPR) facility. Under the scheme, salaried employees with a steady monthly income of up to Rp 17 million ($1,068) will have access to a fixed 6% mortgage rate for residential properties valued up to Rp 500 million ($31,425), broadening an initiative previously limited to informal and micro-business operators.

For the industrial sector, the government is revising standards via an updated Government Regulation (PP) to allow 99.9% fine gold jewelry to utilize VAT facilities, relaxing the existing threshold that restricts relief solely to 99.99% purity.

Airlangga noted that the fourth-quarter measures will roll out rapidly once the Ministry of Finance formalizes the corresponding Finance Ministerial Regulations (PMK).

"We must prepare the PMK and complete the secondary technical guidelines, and we expect to announce the official effective implementation dates in the very near future," Airlangga said.