8 Percent Economic Target Set to Avoid Demographic Trap as Job Absorption Shrinks: Can Consumer Optimism Sustain the National Leap?

The Indonesian government has set an economic growth target of 8% per year under the President's leadership as a crucial step to avoid a demographic crisis. The Deputy Minister of Finance explained that the government established this high target to build a sense of national urgency before the golden period of the demographic dividend concludes between 2035 and 2040. The government is implementing a "dual-arm" financing strategy that combines the State Budget (APBN) to catalyze private investment while optimizing the role of Danantara as a strategic investment driver.

On the other hand, a business leader highlighted the importance of addressing malnutrition and improving child nutrition through the Free Nutritious Meal (MBG) program to elevate the quality of Indonesian human resources. Meanwhile, a researcher from the Prasasti Center warned that tens of millions of national MSMEs continue to face regulatory hurdles, labor uncertainty, and illegal levies that impede their chances to scale up. An Economics Nobel laureate added that achieving rapid growth demands the development of inclusive economic institutions and a dynamic investment climate. The acceleration of the economic growth target and the enhancement of human resource quality clash directly with the shifting structure of workforce absorption in the national manufacturing sector.

The Ministry of Industry noted a decline in the elasticity of national workforce absorption amidst ongoing economic growth. The Minister of Industry revealed that a 1% increase in economic growth can now only absorb approximately 300,000 workers, shrinking compared to previous periods where it reached 400,000 workers. This changing absorption pattern occurs due to the transformation of the manufacturing industry, which is increasingly adopting automation technology in its production processes.

The government is navigating the limitations of domestic workforce absorption by facilitating the dispatch of skilled workers abroad. This strategic move capitalizes on opportunities arising from the population decline in several developed countries, such as Japan, South Korea, Qatar, and Singapore. The dynamics of workforce absorption and the modernization of the manufacturing industry also color the public's perception and optimism regarding current economic conditions.

Bank Indonesia's Consumer Survey indicates that public optimism regarding the national economic condition in September 2026 remains intact. The Head of the BI Communication Department stated that the Consumer Confidence Index (IKK) stands at an optimistic level of 118.1, despite a slight dip from 118.5 in August 2026. The resilience of this public optimism is supported by the increase in the Consumer Expectation Index (IEK) to the level of 128.7, which reflects high confidence in future economic prospects.

On the flip side, the Current Economic Condition Index (IKE) recorded a decline to 107.5 due to the moderating public perception of current economic conditions. The respondent group with expenditures above Rp5 million per month and individuals aged 20 to 30 recorded the highest consumer confidence levels across all regions of Indonesia.

The implementation of high growth targets, technology-based workforce absorption efficiency, and consumer confidence fluctuations have direct impacts on corporate investment planning and job market stability. For industry players and investors, processing technology modernization increases business productivity, although companies are required to anticipate purchasing power limitations and labor regulation changes. Meanwhile, the broader public must leverage digital skills training opportunities to remain competitive in both domestic and international job markets.

Ultimately, the synergy between strengthening human resource quality, establishing inclusive economic institutions, and driving industrial efficiency serves as the primary pillar sustaining the national economic leap. The government is recommended to immediately eradicate illegal levies, streamline MSME licensing, and expand skilled labor training programs for the global market. Concurrently, business actors are advised to optimize measured technology adoption and enhance strategic partnerships to strengthen sustainable business competitiveness.