By: Dion Pramudya
Indonesia’s economic condition is considered to remain stable amid increasing global uncertainty, thus fears of a repeat of the 1998 economic crisis are considered unfounded. This assessment arises because various macroeconomic indicators continue to show positive performance, while the government continues to strengthen various policies to maintain national economic resilience and ensure the public remains protected from the impact of external shocks.
Muhammad Qodari, Head of the Indonesian Government Communications Agency (Bakom), emphasized that Indonesia’s economic fundamentals are currently very strong. He believes the current situation is very different from the period leading up to the 1998 crisis, as nearly all key indicators show healthy performance. He explained that in the first quarter of 2026, the Indonesian economy grew by 5.61 percent annually, a feat that reflects national economic resilience and places Indonesia among the countries with the best economic growth in the world.
In addition to maintained economic growth, national inflation remains within a controlled range, at 3.08 percent annually. Although a slight increase compared to the previous month’s 2.42 percent, this condition is still considered to reflect the price stability that the government has been able to maintain amidst global economic pressures. From a fiscal perspective, Muhammad Qodari explained that the ratio of government debt to gross domestic product is in the range of 40 to 41 percent, well below the maximum limit of 60 percent as stipulated in legislation. Therefore, Indonesia’s fiscal position is considered safe and provides room for the government to maintain development continuity.
In the financial sector, Muhammad Qodari assessed that the national banking system is now much more resilient than during the 1998 crisis, supported by a strong capital adequacy ratio, which is able to support the stability of the national financial system. The existence of the Deposit Insurance Corporation (LPS) is also cited as a crucial factor in increasing public trust in the banking industry, thus minimizing the potential for panic.
Muhammad Qodari added that the government continues to monitor international economic developments and is moving quickly to address various issues to minimize their impact on the public. One concrete step taken is providing a soybean subsidy of IDR 2,000 per kilogram to tofu and tempeh producers in response to rising global soybean prices, which are influenced by the weakening rupiah. According to him, the government continues to address various issues faced by the public and is promptly conveyed to President Prabowo Subianto for appropriate solutions.
A similar view was expressed by National Economic Council member Mochammad Firman Hidayat, who assessed that the Indonesian economy remains robust despite global geopolitical pressures and an economic slowdown. He stated that discussions with President Prabowo Subianto showed that Indonesia’s fundamental indicators remain solid and far from the potential crisis experienced in 1998.
Mochammad Firman Hidayat explained that economic growth of 5.61 percent and inflation maintained at 3.08 percent demonstrate the continued robustness of domestic economic activity. In addition to these macro indicators, he also highlighted the increasingly healthy balance sheet of national corporations. According to him, Indonesian companies now have significantly lower US dollar-denominated debt levels than during the 1998 crisis, thus better managing the risk of exchange rate fluctuations.
Indonesia’s External Debt Statistics released by Bank Indonesia show that private sector external debt reached USD 191.4 billion in the first quarter of 2026, a 1.8 percent decrease compared to the same period the previous year. This decline indicates that businesses have improved risk mitigation capabilities against external pressures, particularly those stemming from exchange rate fluctuations and global economic dynamics.
Mochammad Firman Hidayat warned that rising global energy prices remain a challenge that must be anticipated in the second half of this year, as they could impact production and distribution costs. Nevertheless, he expressed optimism that the government has prepared various anticipatory measures to maintain economic stability and strengthen business and public confidence.
During the past year of President Prabowo Subianto’s administration, several achievements are considered to have further strengthened the foundation of the national economy. Economic growth has been maintained above five percent, inflation has remained under control, financial sector stability has been maintained, food subsidy policies have been continuously implemented to protect the public, coordination between economic institutions has strengthened, and various development and social protection programs have been implemented to maintain public purchasing power. These successes demonstrate the government’s commitment to maintaining stability and strengthening national economic competitiveness amid increasingly complex global challenges.
With solid economic fundamentals, increasingly robust policy coordination, and the government’s swift response to various international dynamics, optimism regarding Indonesia’s economic prospects is well worth maintaining. All elements of the nation are expected to contribute to maintaining confidence in the national economy, supporting various strategic government policies, and collectively strengthening economic resilience so that Indonesia can continue to grow sustainably amidst various global challenges.
*) Macroeconomic Observer