December 4, 2025 | 03:36 pm
TEMPO.CO, Jakarta - Coordinating Minister for Economic Affairs Airlangga Hartarto expected a weakening economic growth in flood-stricken parts of Sumatra. "The growth in disaster-hit areas will certainly slow in North Sumatra, Aceh, and West Sumatra," said Airlangga in Jakarta, Thursday, December 4, 2025.
This statement came against the backdrop of 5.6 percent projected growth for the fourth quarter of 2025. Nevertheless, he said the Indonesian government will strive to drive economic growth in other regions to achieve the designated target.
The Golkar Party politician ensured that the government would provide a number of financial relaxations for the people in flood-hit areas of Sumatra. One such measure is restructuring and eliminating bad loans for MSMEs. "The regulations are in place, and it can be applied automatically," he said.
Economic Loss in Sumatra Floods
The Center of Economics and Law Studies (Celios) estimated Rp68.67 trillion in economic loss due to the floods in Sumatra that impacted both the national and regional economy.
Damaged houses, roads, and bridges, as well as wiped out agricultural land, contribute to the number. "Nationwide, the gross domestic product records Rp68.67 loss, which is equal to 0.29 percent," as quoted from Celios' publication titled 'Economic Loss Impact of Sumatra Flood Disasters,' cited on December 3, 2025.
An economist at Celios Nailul Huda also warns about the nationwide impact of the disasters, including devastated rice fields and loss of stores.
The flow of goods and customers is also affected by the Sumatra floods. For example, West Sumatra markets are not only supplied by local products, but from other regions as well. Goods from West Java cannot enter West Sumatra if the roads are closed.
Likewise, if there's a decline in chili supplies from West Sumatra in Riau, the region would anticipate price hikes of said commodity. "Everything is interconnected. Therefore, disasters in Aceh, West Sumatra, and North Sumatra impact the national economy," said Huda when contacted by Tempo, December 3, 2025.
Ilona Estherina contributed to the writing of this article
Read: Bank Indonesia Forecasts 5.7% Economic Growth in 2026
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