Understanding Economic Incentives and Caution

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The following is important information related to the development of the business universe that needs attention today based on the curation of the SUAR Team.

Various Incentives to Boost the Economy by the End of the Year

In order to boost the sluggish economy and pursue a 5% growth rate, the government is preparing a number of incentives. These incentives are awaited by the business world, which needs an injection of energy to boost the economy.
The incentives include labor-intensive incentives for the transportation and public works sectors; Government Borne Value Added Tax (PPNDTP) for home purchases up to 100% in the second semester; discounts on airfares, toll roads, and trains ahead of the Christmas & New Year period; recruitment of new workers prioritizing the lower economic deciles 1-2; and continuing BSU (Wage Subsidy Assistance).

Bank Indonesia (BI) also provided monetary stimulus by lowering its benchmark interest rate by 25 basis points to 5.25% at its July Board of Governors Meeting.
Economic Policy Analysis of the Indonesian Employers Association (Apindo) Ajib Hamdani had expressed concern regarding the decline in economic growth in the first quarter of 2025 compared to the same period the previous year by 2.4%. Whereas the first quarter is usually supported by the Lebaran consumption cycle which increases money turnover. If there is no further intervention, the potential for economic growth in 2025 could fall even lower.

In contrast to the government's optimistic narrative that still targets growth above 5%, the latest research by the Center of Reform on Economics (CORE) in the CORE Mid-Year Economic Review 2025 report published Friday (07/25/2025). CORE projects that Indonesia's economic growth in the second quarter of 2025 will only reach a range of 4.7%-4.8%, slightly down from the first quarter which recorded 4.87%. In fact, throughout this year, the economy is predicted to remain at the level of 4.6%-4.8%, far from the government's ambition to maintain a minimum rate of 5%.

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Understanding the Paradox of Poverty Patterns, Decreasing in Villages but Increasing in Cities

The Central Bureau of Statistics (BPS), which released data on the poverty rate as of March 2025 released on Friday (25/7/2025), said that the overall percentage of Indonesia's poor population as of March 2025 was recorded to have dropped to 8.47%. This figure fell slightly by 0.1 percent compared to September 2024. This is the lowest figure in the last two decades.
According to BPS data, the rural poverty rate fell from 11.34% in September 2024 to 11.03% in March 2025. Meanwhile, in cities, poverty actually rose slightly, from 6.66% in September 2024 to 6.73% in March 2025.
One of the key factors driving down the rural poverty rate is the increase in the farmer exchange rate (NTP). The NTP in March 2025 reached 123.72, which is higher than the last time the poverty rate was released, namely the September 2024 NTP of 120.30. This means that the selling price of farm produce is higher than the production and consumption costs of farmers. Purchasing power increases, and poverty decreases.
In cities, on the other hand, the slight rise in poverty is a signal that cannot be ignored. While the numbers may seem small, they have a real impact on the millions of people living barely below the poverty line. The rise in urban poverty is driven by two major factors: rising food prices and the increase in underemployment; people who have a job, but work few hours or don't earn enough.

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From AI to Biochar, Green Technology's Path to Overcoming the Climate Crisis

In the midst of the climate crisis, green technology solutions are emerging. Starting from artificial intelligence (AI) technology to Biochar.
The use of big data and machine learning requires a lot of energy and has an impact on increasing emissions, especially if it is not supported by clean energy.
In addition to the use of AI, biochar technology is also emerging. This technology uses biomass to produce charcoal that can store carbon in the soil for hundreds of years.

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Government Banks Funding Koperasi Merah Putih, Beware of Risks

To support the success of the Merah Putih Village Cooperative (KDMP) program, the government ordered the State Bank Association (Himbara) to be involved in funding the cooperative program.
Deputy Minister of Cooperatives and Coordinator of the Task Force for the Acceleration of KDMP Establishment, White Ferry Juliantono, explained that the initial financing of Kopdes will be channeled through a special People's Business Credit (KUR) with a ceiling of up to Rp3 billion per cooperative.
The interest rate charged is 6%, with a tenor of 6 years for working capital and 10 years for investment. The government also proposes a grace period of 6 months to allow room for cooperative adaptation in the early stages of operations.
"The PMK (Minister of Finance Regulation) is being finalized at the Ministry of Finance. Then we completed the technical guidelines for the operationalization of village pharmacies or village clinics. In the near future, the Minister of Energy and Mineral Resources Regulation related to the distribution of 3 Kg LPG gas will also be issued soon," Ferry said in a press statement on July 15.

For this reason, as part of Himbara, Bank Mandiri plays an active role in assisting cooperatives designated as KDKMP launch points throughout Indonesia. In these cooperatives, Bank Mandiri has also prepared digital financial services such as Mandiri Agent and QRIS, as well as ensuring the readiness of physical service infrastructure.
BRI President Director Hery Gunardi said that the launch of KDMP by President Prabowo is an important momentum in building an inclusive and sustainable populist economic foundation. One of the concrete manifestations of BRI's commitment in providing easy access to financial services for rural communities is through the presence of AgenBRILink which is integrated with cooperatives.

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Indonesia's Nickel Pig Iron Production Outperforms China

Since 2020, Indonesia's Nickel Pig Iron (NPI) production has outperformed China. Indonesia began to defeat China's dominance, which has produced higher NPI since 2005. Nickel Pig Iron (NPI) is a component of raw iron containing 15 percent nickel ore.
Based on data from the Indonesian Nickel Miners Association (APNI) reported in July 2025, Indonesia's NPI production in 2016 was 0.1 million tons. This figure is still below China, which at that time produced 0.4 million tons. Slowly, Indonesia's NPI production began to increase until in 2020 it was recorded at 0.6 million tons and could exceed the NPI produced by China at 0.5 million tons.
The increase in Indonesia's NPI production continues until in 2023 it is recorded at 1.3 million tons. Meanwhile, China's NPI production during the 2021-2023 period stagnated at 0.4 million tons.

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International Hijriah Food Festival 2025: Kadin Indonesia China Committee (KIKT) in collaboration with Khazanah Al Wahda Creative da'wah media, along with other communities organized the international hijriah food festival 2025 in commemoration of the Islamic new year 1446 H. The festival has been held since early July in several cities, now it is Solo's turn to host it on 27 to 28 July 2025 at Pamedan Mangkunegaran Field, Solo, Central Java.

The festival showcases a variety of halal cuisines from the Middle East, South, West and North Asia, where visitors can enjoy a wide selection of food. In addition, this event also presents a variety of entertainment, children's games, and inspirational talk shows with guest star Habib Jafar. This event is open to the public free of charge.

KSSK III 2025 Meeting Result Conference: The Financial System Stability Committee (KSSK) held its third meeting results conference in 2025, on Monday, July 28, 2025 at 16:00 in the Excellence room, Pacific Century Palace tower 30th floor, Lembaga Penjamin Simpanan (LPS) Building.

The event was attended by top officials of the country's financial system, namely Minister of Finance Sri Mulyani, Governor of Bank Indonesia (BI) Perry Warjiyo, Chairman of the Board of Commissioners of the Financial Services Authority (OJK) Mahendra Siregar, and Chairman of the Board of Commissioners of LPS Purbaya Yudhi Sadewa. This meeting is a regular meeting held to discuss and navigate the financial system, which is held once every three months of the year.

In the first quarter, the results of the meeting confirmed that the stability of the financial system was maintained despite the tariff policy of the US president, Donald Trump. Then the second quarter agreed to increase vigilance and strengthen coordination and policies for the future, while for the third quarter it is still waiting for the results of the meeting announced on July 28.