Finance Minister Purbaya Yudhi Sadewa revealed that certain parties have been holding back Indonesia’s economic growth, keeping it stuck around 5 percent for years.

This issue came to light when he discussed demand pull inflation, referring to a situation where inflation rises sharply as demand outpaces Indonesia’s potential economic growth.

“What’s the actual potential growth rate for Indonesia’s economy? If Bank Indonesia (BI) estimates it at 5 percent, maybe they’ve miscalculated, right? Others also seem to come up with 5 percent,” Purbaya said during the National Finance Day Economic Forum held at CNN Studio, South Jakarta, on Monday (Oct 27).

“Because a 5 percent growth rate isn’t enough to absorb the growing workforce entering the job market. I believe the real potential is between 6.5 and 6.7 percent, somewhere around the middle. So, if we can get close to that range, it’s already quite good,” he continued.

Purbaya emphasized that Indonesia has yet to reach its potential growth rate, particularly after the last crisis during the COVID-19 pandemic. He identified this as a key factor behind the country’s high unemployment rate.

The state treasurer stressed that unemployment refers to people who are truly jobless, not those shifting from the formal to the informal sector.

“I have a large stock of unemployed people. Even if I boost economic growth to 7 or 8 percent for several years, that still won’t be enough to absorb all of them. So, it won’t cause demand pull inflation. Why should we fear growth above 6 percent? That’s a wrong mindset. They need to read their economics books again,” the minister asserted.

“This is a very serious issue. It’s the underlying reason why Indonesia hasn’t been able to grow above 6 percent. Every time growth approaches 6 percent, it’s deliberately slowed down again — because they fear the economy might ‘overheat.’ Overheat what? There are still plenty of unemployed people,” Purbaya stressed.

Therefore, he set a target for Indonesia’s economy to grow above 5.5 percent year-on-year (yoy) in the fourth quarter of 2025. This achievement would bring the full-year growth to around 5.2 percent.

He also vowed to strengthen economic momentum year after year. For instance, in 2026, he expects Indonesia’s economy to grow around 6 percent annually.

“I believe as long as our programs are properly implemented, growth should accelerate — especially since I expect the private sector to become more active next year. In the following years, it should grow even faster. By the fifth year of President Prabowo’s administration, we might already see signs of growth approaching 8 percent,” he concluded.