Jakarta - The Indonesian Chamber of Commerce and Industry (Kadin) believes that the recovery of national economic growth to 5 percent in the second half of 2025 is highly achievable, provided the government can optimize state spending, mobilize State-Owned Enterprises (SOEs), and rebuild business confidence.

This was conveyed by Aviliani, Deputy Chairperson for Macro-Micro Economic Policy Analysis at Kadin Indonesia, during the Bisnis Indonesia Midyear Challenges 2025 event titled "Mapping Opportunities Amid Global Economic Volatility", held at Hotel Borobudur, Central Jakarta, on Tuesday (July 29, 2025).

“If we look at the second half of this year (Q2), we hope to see improved economic growth, potentially returning to 5 percent. But that comes with conditions. First, we need the state and regional budgets (APBN and APBD) to start spending again,” said Aviliani, who is commonly known as Avi.

Avi noted that economic growth in the second quarter was negative due to delayed government spending.

Although government spending contributes only about 8 percent to the Gross Domestic Product (GDP), Avi emphasized that it remains a key driver of national economic activity.

“Government spending typically drives economic growth, even if it only contributes 8 percent to GDP,” she added.

Avi also highlighted the importance of SOEs in spurring private sector activity. She pointed out that many SOEs, particularly in the construction sector, have been slow to move due to delays in implementing state-funded projects.

“Those are the two most critical elements for boosting economic growth,” Avi stressed.

Furthermore, Avi underscored the need to foster a positive perception among business players amid ongoing global uncertainty.

“What we need to build now is domestic perception. How can government policies instill enough confidence in business actors to encourage expansion? Confidence is one of the key factors,” she said.

According to Avi, policy focus should shift toward the demand side, rather than solely the supply side. By boosting people’s purchasing power through government expenditure, sectors such as MSMEs and tourism will also grow and create jobs.

“If it's not well-targeted, it won’t create a multiplier effect. We need to focus on the demand side. Policies now must address demand, not just supply,” Avi asserted.

Meanwhile, Secretary of the Coordinating Ministry for Economic Affairs, Susiwijono Mugiarso, stated that global economic pressures are very real and are directly impacting the national economy.

He noted that geopolitical tensions across several regions are severely affecting supply chains, logistics costs, and commodity prices.

“The impact on the economy is significant, particularly in terms of supply chains, logistics costs, and overall price components,” he explained.

He also reminded attendees that global economic growth forecasts have been revised downward from 3.3 percent to 2.8 percent, while projected global trade volume has sharply dropped from 3.4 percent to just 1.7 percent.

“This will certainly have a major impact,” he stressed.

At the same event, Bisnis Indonesia President Commissioner Hariyadi Sukamdani stated that current challenges also present opportunities for transformation.

“We believe that the collateral impacts we are facing today, if managed wisely, can serve as momentum for a more competitive and resilient economic transformation,” he concluded.