Fiscal policies by Finance Minister Purbaya Yudhi Sadewa, known as the 'Purbaya Effect', are beginning to show positive impacts on the national economy, particularly through increased BUMN lending. However, economists assess that Indonesian consumers' purchasing power has not fully recovered. Household consumption, the main driver of the economy, has not grown optimally due to a lack of confidence in future income prospects.
Jakarta, VIVA – Although fiscal policies by Finance Minister Purbaya Yudhi Sadewa are starting to show positive results for economic growth, several experts assess that public purchasing power has not fully recovered. This condition keeps household consumption, long the main engine of Indonesia's economy, from growing optimally.
Chief Expert of the National Economic Council (DEN) Lutfi Ridho emphasized that the government is continuously working to strengthen household consumption, but the key lies in public confidence in their future income prospects. “They must be confident, especially in future income confidence,” Lutfi said in Jakarta on Wednesday, November 13, 2025.
According to Lutfi, public optimism about income stability is a crucial factor for consumption to rise again. He stated that DEN is now focusing on boosting public confidence and household economic stability. “If that confidence is formed, household consumption can return as the main engine of economic growth, although investment will still be the primary driver next year,” he said.
Lutfi assessed that various government fiscal policies, including the program known as the ‘Purbaya Effect’, have provided a boost to the banking and investment sectors. However, without increased consumption from the public, the effect cannot be felt comprehensively at the grassroots level.
Meanwhile, Head Economist of The Indonesia Economic Intelligence (IEI) Sunarsip views the Finance Minister's policies as already showing positive impacts on the national economy. He noted that lending to state-owned enterprises (BUMN) surged sharply in September 2025, indicating the policy effect is at work. “Why do I say this Purbaya effect is already working? Because most of the banking credit growth sources are still from BUMN debtors. From (growth) 1.9 percent (August 2025) to 10.04 percent (September 2025),” Sunarsip stated.
Besides BUMN lending, the private sector also showed a slight increase, from 11.07 percent to 11.12 percent. However, according to him, that growth portion is still more supported by lending to large corporations rather than private businesses.
The ‘Purbaya Effect’ policy itself results from the government's placement of Rp200 trillion in funds at member banks of the State-Owned Banks Association (Himbara). This step aims to strengthen banking liquidity so they can more aggressively disburse credit and stimulate the real sector.