JAKARTA, Indonesia

Indonesian authorities on Thursday said they are optimistic that the program to accelerate national economic recovery will soon start delivering results.

Officials of the central bank, Financial Service Authority (OJK), and Finance Ministry held an online meeting to discuss the economic revitalization plan.

One of the policies that are starting to have a positive impact is the removal of down payments to buy motorbikes, cars, and property that came into effect in early March, according to the central bank.

“The property sector has seen a boom due to the 0% down payment stimulus program and the reduction of value-added tax (VAT) to 0%,” said Perry Warjiyo, governor of Bank Indonesia.

He said the program had boosted credit growth in the property sector this month, with people spending more on apartments and housing.

“More people are also buying property – mostly medium-sized properties – for investment,” he added.

He said the central bank has also taken other measures to push economic recovery, including lowering interest rates since last year by 150 basis points to 3.5%.

“This is the lowest level of the benchmark interest rate in our history,” Warjiyo said.

He explained that the aim is to provide credit stimulus to businesses to boost recovery in Indonesia, with the central bank expecting the national economy to grow between 4.3% and 5.3% this year.

Wimboh Santoso, chairman of the OJK, said the policy of reducing down payments and taxes for the automotive and property sectors was geared toward increasing public consumption and demand.

“With higher demand, the industry will ramp up production and need more labor,” he said.

He said the authority had set a target of 7.5% bank credit growth this year.

* Writing by Rhany Chairunissa Rufinaldo with Anadolu Agency's Indonesian language services in Jakarta