Indonesia's president told attendees at an international economic forum that the country's economic expansion is "real" and will surpass the official growth target this year, attributing part of the improvement to social and local development programmes launched by his administration.
Speaking after a period of market unease prompted by a warning from index provider MSCI concerning stock market transparency and a downgrade in outlook on Indonesia's bonds by Moody's, the president highlighted several flagship efforts he says are supporting domestic demand.
At the forum, which drew representatives from international agencies, the president described the administration's free meals initiative alongside programmes to develop village cooperatives and fishing villages as elements that will strengthen the economy. He said the free meals scheme has generated employment and increased farmers' incomes, and noted the programme reached more than 60 million recipients.
The president acknowledged a limited number of food poisoning incidents linked to the scheme but maintained it was successful. He recounted meetings with industry leaders who, he said, reported improved consumption as a result of the programme: "I met with industry leaders... they told me that free meals have improved consumption," he said. He added a point about the economic approach, saying: "We are not running a handout economy."
Also at the event, senior economic minister Airlangga Hartarto offered an outlook on growth, saying the economy has the potential to expand by 5.6% this year, which would exceed the official target of 5.4%. He linked that upside to projects initiated by the sovereign wealth fund Danantara Indonesia as well as government-backed projects.
Airlangga additionally said market sentiment has brightened, referencing a rebound this week as evidence of improved investor mood. The remarks from both officials came in a forum setting where international agencies were present and where recent scrutiny from market watchdogs and rating agencies has drawn attention to Indonesia's financial and market governance.
The discussion at the forum therefore combined policy defense and forward-looking growth projections, with the administration pointing to targeted social programmes and state-led investment projects as contributors to consumption and broader economic momentum.