{ "success": true, "data": { "id": 1818735, "msgid": "8-key-indonesian-economic-indicators-still-healthy-or-starting-to-ail-1782201160", "date": "2026-06-23 14:00:44", "title": "8 Key Indonesian Economic Indicators: Still Healthy or Starting to Ail?", "author": "", "source": "CNBC", "tags": "", "topic": "Economy", "summary": "Bank Indonesia has aggressively raised its benchmark rate by a cumulative 100 basis points within a month to 5.75% to defend the rupiah and pre-empt inflation. While Q1-2026 GDP growth remained robust at 5.61% and inflation is within target, the rupiah recently hit an all-time low and the Jakarta Composite Index has plunged over 32% from its January peak amid global uncertainty and MSCI transparency concerns.", "content": "

Jakarta, CNBC Indonesia - Bank Indonesia (BI) has again taken an\naggressive step in its monetary policy. During the monthly Board of\nGovernors Meeting (RDG) on 17-18 June 2026, the central bank decided to\nraise the BI Rate by 25 basis points (bps) to 5.75%. This increase is\nnot a standalone move. Previously, BI had already raised the benchmark\ninterest rate by 50 bps at the RDG on 19-20 May 2026, from 4.75% to\n5.25%. Shortly thereafter, BI again surprised the market through a\nweekly RDG on 9 June 2026 by raising the BI Rate by 25 bps to 5.50%.\nWith the additional increase at the June RDG, the total BI Rate hike\nwithin approximately one month has reached 100 bps. This move indicates\nthat BI is choosing to stand very firmly on the stabilisation path,\nparticularly to safeguard the rupiah exchange rate and contain inflation\nrisks amid persistently high global pressures. BI emphasised that the\ninterest rate hike is a further step to strengthen rupiah exchange rate\nstabilisation, as well as a pre-emptive measure to ensure inflation in\n2026 and 2027 remains within the government\u2019s target. However, a high\ninterest rate policy certainly does not only impact financial markets.\nIn the longer term, rate hikes can also affect consumption, credit,\ninvestment, purchasing power, and business activity. So, what is the\ncondition of the Indonesian economy as BI aggressively tightens monetary\npolicy again? The CNBC Indonesia research team summarises the latest\nstate of the Indonesian economy based on several key indicators. 1.\nIndonesia\u2019s Economic Growth: The Indonesian economy still showed strong\nperformance at the beginning of this year. Statistics Indonesia (BPS)\nrecorded that the economy grew 5.61% year-on-year (yoy) in the first\nquarter of 2026. This figure is a positive signal as the economy is\nstill able to grow above the psychological level of 5%. The growth also\nindicates that domestic economic activity remains quite robust, despite\nincreasing global and financial market pressures. From the production\nside, the highest growth occurred in the accommodation and food and\nbeverage services sector, which grew 13.14%. Meanwhile, from the\nexpenditure side, the government consumption component recorded the\nhighest growth at 21.81%. However, compared to the fourth quarter of\n2025, the Indonesian economy contracted 0.77% on a quarterly basis. This\nshows that growth momentum still needs to be maintained, especially as\ninterest rates begin to move higher and potentially restrain business\nexpansion and public consumption. 2. Inflation: Indonesia\u2019s inflation\nremains within BI\u2019s target range. In May 2026, inflation was recorded at\n0.28% month-to-month (mtm). Annually, inflation stood at 3.08% yoy. This\nfigure is still within the inflation target of 2.5\u00b11%. This means that\nfrom the perspective of goods and services prices, national inflationary\npressures are still relatively under control. Core inflation also\nremains manageable. In May 2026, core inflation was recorded at 0.22%\nmtm and 2.59% yoy. Core inflation is important to monitor as it reflects\nmore fundamental price pressures, particularly from the demand side.\nWith inflation still under control, this BI rate hike appears to be\ndirected more towards maintaining rupiah stability and anticipating\nfuture risks, rather than solely due to a current surge in domestic\ninflation. 3. Rupiah Exchange Rate: The rupiah remains one of the main\nreasons BI is choosing to tighten monetary policy. Pressure on the\nexchange rate has been quite significant recently, mainly due to global\nuncertainty stemming from geopolitical conflict in the Middle East,\nwhich has driven high demand for the US dollar. In trading on Friday\n(19\/6\/2026), the rupiah weakened again to Rp17,830\/US$ at the market\nopening. This depreciation occurred after the previous day\u2019s trading on\nThursday (18\/6\/2026), when the rupiah had closed 0.17% stronger at\nRp17,700\/US.T<\/em>h<\/em>e<\/em>r<\/em>u<\/em>p<\/em>i<\/em>a<\/em>h<\/em>\u2032s<\/em>c<\/em>u<\/em>r<\/em>r<\/em>e<\/em>n<\/em>t<\/em>p<\/em>o<\/em>s<\/em>i<\/em>t<\/em>i<\/em>o<\/em>n<\/em>i<\/em>s<\/em>i<\/em>n<\/em>d<\/em>e<\/em>e<\/em>d<\/em>s<\/em>l<\/em>o<\/em>w<\/em>l<\/em>y<\/em>r<\/em>e<\/em>c<\/em>o<\/em>v<\/em>e<\/em>r<\/em>i<\/em>n<\/em>g<\/em>a<\/em>f<\/em>t<\/em>e<\/em>r<\/em>a<\/em>p<\/em>r<\/em>i<\/em>o<\/em>r<\/em>w<\/em>e<\/em>a<\/em>k<\/em>e<\/em>n<\/em>i<\/em>n<\/em>g<\/em>t<\/em>r<\/em>e<\/em>n<\/em>d<\/em>t<\/em>h<\/em>a<\/em>t<\/em>s<\/em>a<\/em>w<\/em>t<\/em>h<\/em>e<\/em>e<\/em>x<\/em>c<\/em>h<\/em>a<\/em>n<\/em>g<\/em>e<\/em>r<\/em>a<\/em>t<\/em>e<\/em>b<\/em>r<\/em>e<\/em>a<\/em>c<\/em>h<\/em>R<\/em>p<\/em>18,\u2006000\/U<\/em>S<\/em><\/span>\nand even record an all-time low of Rp18,170\/US$ at the close of trading\non Monday (8\/6\/2026). This movement indicates that pressure on the\nrupiah has not fully subsided. The BI Rate hike is expected to help\nmaintain the attractiveness of rupiah assets, stem foreign capital\noutflows, and dampen exchange rate volatility. However, the challenge is\nnot small. If US dollar pressure remains strong, the rate hike may not\nimmediately be sufficient to bring the rupiah back to a consistent\nstrengthening path going forward. 4. Jakarta Composite Index (IHSG):\nPressure is also being felt in the stock market. The IHSG closed down\n0.78% at 6,172.34 on Thursday (18\/ 6\/2026), after BI again raised the BI\nRate to 5.75%. Measured from its highest level this year, the IHSG\u2019s\ndecline has been very deep. Based on Refinitiv data, the IHSG touched\n9,134.70 on 20 January 2026. Compared to its position on 18 June 2026,\nthe IHSG has plunged around 32.4%. This is already much better compared\nto the IHSG\u2019s lowest level in 2026, which briefly touched the 5,300\nrange earlier last week. Pressure on the IHSG comes not only from high\ninterest rates but also from MSCI sentiment since the beginning of the\nyear. In late January 2026, MSCI implemented an interim freeze on\nseveral changes to Indonesian stock indices due to concerns over free\nfloat transparency, share ownership structures, and indications of\ncoordinated trading. Market concerns grew because MSCI also opened the\npossibility of downgrading Indonesia\u2019s status from Emerging Market to\nFrontier Market if transparency improvements are deemed insufficient. In\nthe June 2026 Global Market Accessibility Review, MSCI again noted\nconcerns regarding Indonesia, particularly on the information flow\ncriterion.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/8-key-indonesian-economic-indicators-still-healthy-or-starting-to-ail-1782201160", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }