THE business world assesses that President Prabowo Subianto is trying to prioritize maintaining domestic economic stability at the start of his administration. This can be seen from the old faces who will fill the ministerial seat in the economic sector.
“However, with such complex economic challenges, there must be an evaluation of performance, so that the aspect of economic acceleration becomes the president’s main concern,” said Indonesian Employers’ Association (Apindo) Economic Policy Analyst Ajib Hamdani in his statement, Sunday (20/10).
At least, he continued, there are three fundamental economic challenges that the government must address in the future.
The first concerns fiscal challenges that are under pressure. The 2025 APBN expenditure of IDR 3,613.1 trillion is projected to be supported by state revenues which are predicted to reach IDR 3,005.1 trillion.
This means that there is a potential deficit of more than IDR 600 trillion which will add to the state debt. This also includes fiscal problems with debt maturity of around IDR 800 trillion in 2025.
“With the existing fiscal complexity, it is hoped that the ranks of the Ministry of Finance will have a breakthrough solution,” said Ajib.
The second fundamental problem is the still high unemployment rate. Data for 2024 shows the unemployment rate at 5.2%. Always achieve investment over target over the last five years it still cannot be the main solution to absorb more workers. In fact, there is a paradox, because the phenomenon of layoffs and ratio numbers is increasing incremental output ratio (ICOR) continues to increase.
“This means that investment has decreased in contribution to economic growth,” explained Ajib.
Then the third problem is poverty. The government must really encourage policies that are pro-equitable and encourage the reduction of poverty rates. With more than 60% of Gross Domestic Product (GDP) supported by household consumption, economic growth will sustainable if poverty can continue to be reduced and people’s purchasing power increased.
Statistical data for 2024 shows the poverty rate at 9.03%, or around 25 million people. However, said Ajib, there is another interesting fact that should be of concern to the government, namely that the poor people who are recipients of BPJS Central Contribution Assistance (PBI) number more than 96 million people.
Therefore, the government is required to be careful with initial data as a foundation for future policy. “There are still many burdens with the size of this poor community, whether 25 million or 96 million people,” said Ajib.
President Prabowo already has a priority program listed in Asta Cita. Of the eight superior programs, five of them are about economics. This means that the President understands that the problems and challenges in the future will be economic issues.
Therefore, structural economic reform is needed to be a solution. “A series of policies are needed that aim to increase the efficiency and productivity of economic sectors through fundamental changes in the economic system, regulations and infrastructure,” explained Ajib. (E-2)
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