Jakarta – Amid increasing pressures from the global economic slowdown, economic policies implemented by President Prabowo have managed to contain the negative impacts on the national economy. Several parties have noted that the government’s strategic steps to maintain domestic economic stability are well-targeted and have produced tangible results on the ground.
In this regard, the Financial System Stability Committee (KSSK) reported that the stability of the financial system remained intact in the first quarter of 2025 despite rising uncertainties in the global economy and financial markets.
Sri Mulyani Indrawati, Minister of Finance and Chairperson of the KSSK, stated that global economic uncertainty stems from the dynamics of reciprocal tariff policies imposed by the United States government, which have escalated the trade war.
The KSSK, consisting of the Ministry of Finance, Bank Indonesia (BI), Indonesia Deposit Insurance Corporation (LPS), and Financial Services Authority (OJK), continues to enhance coordination in implementing various policies to anticipate the spillover effects of global economic pressures on the domestic economy.
“The KSSK has agreed to continuously increase vigilance, strengthen coordination, and enhance policies among member institutions in efforts to mitigate potential spillover risks from global factors, while simultaneously strengthening the domestic economy and financial sector,” said Sri Mulyani.
Sri Mulyani explained that the implementation of reciprocal tariffs has caused a tariff war, which is expected to negatively impact global economic growth, as well as the economies of the United States and China. This situation has led to increased uncertainty in global financial markets and uncertainty in international trade and investment governance.
This condition coincides with rising expectations of a decrease in the US central bank’s benchmark interest rate (Fed Fund Rate/FFR), causing global capital flows to shift from the US to countries and assets considered safe havens, especially financial assets in Europe and Japan, as well as gold commodities.
“Meanwhile, capital outflows continue from developing countries, exerting pressure on currency depreciation across various emerging economies,” Sri Mulyani added.
Given these global conditions, Indonesia will continue to increase its vigilance in facing these global economic dynamics. The government will remain active in early mitigation efforts, including negotiations and communications with the US government.
The government is also undertaking deregulation, particularly by removing non-tariff barriers across various ministries and institutions. Furthermore, efforts to continuously boost and strengthen domestic demand will be maintained through coordinated fiscal and monetary policies.
“Indonesia is expected to be able to control the negative impacts of global uncertainty, maintain the stability of the financial system, and sustain economic growth momentum,” Sri Mulyani concluded.*
