By: Wahyu Gunawan
Indonesia’s economic stability remains intact despite the looming external challenges. Several key indicators show that the national economy is still in solid condition. The issue of economic weakness circulating in society has no strong basis if we look at the data and policies implemented by the government at this time.
Finance Minister Sri Mulyani Indrawati emphasized that Indonesia’s economic and fiscal conditions are in a positive situation. Several key indicators, such as the Purchasing Managers’ Index (PMI) and the trade balance, show a trend towards expansion.
Indonesia’s manufacturing PMI in February 2025 recorded a figure of 53.6, an increase of 1.7 points compared to the previous month. This figure reflects the manufacturing sector’s continued growth, indicating industry players’ confidence in the national economic outlook.
In addition, Indonesia’s trade balance remains in a surplus position, reflecting strong export resilience amid global uncertainty. With controlled fiscal conditions, the government has sufficient room to respond to economic dynamics with targeted policies. These factors are clear evidence that the Indonesian economy is still very strong and far from the signs of weakening that some parties have feared.
Coordinating Minister for Economic Affairs Airlangga Hartarto also highlighted that although the Rupiah exchange rate fluctuates, the economic fundamentals remain well maintained. Export growth, foreign exchange reserves, and the trade balance that continue to show positive trends prove that the Indonesian economy remains resilient in facing various global pressures. The government has also implemented a Foreign Exchange Export Proceeds (DHE) policy to increase state revenue and strengthen the Rupiah exchange rate in the long term.
The implementation of the deregulation policy initiated by the government also has a positive impact on the flow of exports and imports. Ease of licensing and simplification of regulations provide support for business actors in carrying out international trade activities more smoothly. With these strategic steps, the Indonesian economy is certain to be more solid and able to face various challenges that arise in the future.
Concerns about the potential for a repeat of the 1998 monetary crisis have no relevance to the current economic conditions. Head of the Macroprudential Policy Department of Bank Indonesia, Solikin M. Juhtegaro, emphasized that the current economic situation is very different compared to the crisis that occurred more than two decades ago. Economic growth reaching 5.02% throughout 2024 and inflation maintained at 1.57% year on year are concrete evidence that the Indonesian economy remains in a stable condition.
From a global perspective, Indonesia’s economy is in a better position than some other countries. Vietnam and India, despite their high economic growth, are facing higher inflation rates than Indonesia.
Meanwhile, Indonesia’s foreign debt level of only around 30% of Gross Domestic Product (GDP) is still much lower than Malaysia’s which reached 69%. Thus, Indonesia’s economic structure is still very strong and under control.
The recent weakening of the Rupiah exchange rate is more influenced by external factors, such as global geopolitical tensions and the economic policies of the United States. The increase in the US dollar index (USD) has also put pressure on the currencies of developing countries, including Indonesia. However, Bank Indonesia continues to monitor market conditions and is ready to take the necessary steps to maintain exchange rate stability.
Amid uncertain global dynamics, Bank Indonesia remains optimistic that the Indonesian economy will continue to grow steadily. The monetary and fiscal policies currently implemented have been designed to maintain the resilience of the national economy in facing various external challenges. Investor confidence in Indonesia’s economic fundamentals remains high, as reflected in the increasing investment growth.
With the various positive indicators available, claims about economic slowdown have no strong basis. Solid economic foundations, supported by adaptive government policies and the stability of the fiscal and monetary sectors, ensure that the Indonesian economy remains on a sustainable growth path. Therefore, concerns about economic slowdown should no longer be a major issue in public discussions, given the facts that clearly show otherwise. (*)
Economic and Development Researcher – Indonesian Prosperous Economic Forum
