Indonesian Government Launches Comprehensive Credit Program for 2026

Economic Growth Strategy

The Indonesian government is implementing a comprehensive economic strategy for 2026, targeting 5.4% GDP growth through a substantial Rp331.8 trillion credit program. This initiative is designed to support micro, small, and medium enterprises (MSMEs) that contribute approximately 60% to national economic output and play a crucial role in employment ¹

Credit Program Details

The credit program comprises several key components:

1. Kredit Usaha Rakyat (KUR): Rp295 trillion
2. Agricultural machinery credit: Rp300 billion
3. Labor-intensive industry credit: Rp500 billion
4. Housing credit: Rp36 trillion

These funds are designed to stimulate various sectors of the economy, with KUR being the largest component, specifically targeting MSMEs ¹

Fiscal Policy Implementation

To achieve the ambitious growth target, effective fiscal policy implementation is crucial. Government officials emphasize the need for timely budget disbursement and strategic spending that directly impacts economic growth. Mari Elka Pangestu, Vice Chair of the National Economic Council, stressed that fiscal measures must be executed promptly, with government spending having a direct impact on growth ²

Coordination and Monitoring

Finance Minister Purbaya Yudhi Sadewa plans to personally monitor budget absorption across various ministries and government agencies. He intends to visit these entities to ensure that spending is not delayed, stating that he will 'nudge' those with slow disbursement ³

Economic Outlook

The government's economic growth target for 2026 represents a modest increase from the 5.2% target for 2025. The success of this strategy depends on both the effective implementation of the credit program and broader fiscal measures. The government is optimistic that with coordinated policy efforts between the Ministry of Finance and Bank Indonesia, growth could approach 6% in the first quarter of 2026 ³