By: Mila Mayang Sari*
The global economy is currently mired in heightened uncertainty due to trade wars, geopolitical tensions, and economic slowdowns in several developed countries. However, amid these challenging conditions, Indonesia has demonstrated remarkable resilience and optimism. A range of macroeconomic indicators and financial market performance show that Indonesia is not only surviving but continuing to grow steadily. This serves as strong evidence that the country has robust fundamentals to weather external pressures and unpredictable global shocks.
According to data from the Central Statistics Agency (BPS), Indonesia’s economy grew by 4.87% year-on-year in the first quarter of 2025. This places Indonesia as the second-fastest growing economy in the ASEAN-5, trailing only the Philippines. This achievement surpasses the growth rates of Singapore (3.8%), Malaysia (4.4%), and Thailand, which reported even lower figures. Although there has been a slight deceleration compared to the previous quarter, the performance confirms that Indonesia remains on a stable recovery path. Even under global pressure, Indonesia has managed to maintain positive economic momentum.
Economist Syafruddin Karimi projects that Indonesia’s economic growth throughout 2025 will remain within the range of 4.95%–5.05%. Strong domestic consumption is expected to be the main driver of growth, while exports continue to face headwinds due to weakening global demand. However, increased spending during Eid and year-end holidays, along with a consumption peak in the third quarter, suggests that Indonesian purchasing power remains intact. This resilience in domestic demand is a key strength supporting the national economy amidst a sluggish global trade environment.
On the financial market front, Indonesia has once again attracted international attention. Since early April 2025, the Jakarta Composite Index (IHSG) has surged by 10.64%. This performance makes Indonesia the fastest-recovering stock market in the world, outperforming major indices such as the S&P 500 (USA), DAX (Germany), and Nikkei (Japan). The sharp rise in the IHSG reflects strong investor confidence in Indonesia’s economic stability and growth prospects, especially amid the global sentiment clouded by trade disputes and geopolitical volatility.
According to Mulya Amri, Executive Director of the Kadin Institute, the revival of Indonesia’s stock market is driven by several strategic factors. First, investment realization in Q1 2025 reached IDR 465.2 trillion, up nearly 16% year-on-year. This investment created over 594,000 jobs, with more than half outside the island of Java. This indicates that the government has successfully maintained equitable development momentum and fostered an inclusive investment climate.
Second, global financial firm UBS upgraded Indonesia’s market rating from “neutral” to “overweight.” This upgrade signifies that Indonesia is now considered a highly attractive investment destination, offering high returns with relatively low risk. UBS highlighted that the Indonesian stock market is currently undervalued but supported by strong fundamentals—making it an ideal option for defensive investment strategies amid global uncertainty.
Optimism surrounding Indonesia’s economic strength is also reinforced by confidence in government policies that prioritize domestic resilience. President-elect Prabowo Subianto has consistently emphasized the importance of national self-reliance as a strategic response to global challenges. This policy stance has received positive feedback from the market, as it has proven effective in maintaining macroeconomic stability while enhancing investment appeal.
These developments affirm that Indonesia possesses strong capital to withstand a global economic slowdown. Robust domestic consumption, inclusive investment growth, capital market stability, and adaptive policy reforms form the core pillars of the nation’s economic resilience. Added to this are the strengthening of domestic financial institutions and more equitable development distribution, showing that Indonesia’s economy is not only growing but also becoming more sustainable and resilient.
Challenges certainly remain—particularly with weak export performance and volatile global dynamics. However, with the right policy strategies, strong institutional support, and collaborative efforts between the government, the private sector, and society, Indonesia is well-positioned to maintain stability and drive inclusive, competitive economic growth. In this context, the active role of businesses, market actors, and investors is crucial in realizing Indonesia’s vast potential.
While many other countries continue to struggle amid crises and uncertainty, Indonesia has charted a clear course toward recovery and economic strengthening. Solid macroeconomic foundations, progressive policy combinations, and market trust—both domestic and international—are Indonesia’s key assets in navigating the ever-evolving global economic landscape. Indonesia is not merely enduring; it is advancing with confidence.
*) The author is an Economic Analyst
