Analyst says the weakening rupiah is not Indonesia's sole economic indicator
An economist from Muhammadiyah Bengkulu University, Dr. Surya Vandiantara, said that the depreciation of the rupiah cannot be used as the sole indicator to assess a country’s economy. He argued that, besides currency fluctuations, other indicators such as GDP growth, the current account balance, foreign exchange reserves, and fiscal indicators must be considered. Surya said that evaluating solely on currency fluctuations would be non-comprehensive, potentially leading to misreading the economic situation, including when assessing Indonesia.
‘The narrative that seeks to discredit Indonesia’s economy by using only one indicator such as the value of the United States dollar is not comprehensive,’ Surya said in a briefing on Saturday, 23 May 2026.
From a fundamental economic perspective, Surya assessments Indonesia’s economy remains solid. Referring to data from BPS, Indonesia’s economic growth has remained positive in successive quarters, with Q1-2026 at 5.61%, Q4-2025 at 5.39%, and Q3-2025 at 5.04%.
‘This fact shows that the rise of the United States dollar does not significantly affect Indonesia’s economic growth,’ he said.
Regarding President Prabowo’s statement that villagers do not use the dollar, Surya explained that this is an on-the-ground fact. In practice, transactions using the US dollar are more commonly undertaken by exporters and importers, not rural villagers. ‘Export–import activity and foreign exchange investments are typically undertaken more by people living in urban areas than by those in rural areas,’ he said.
However, he added that the government has also taken mitigation measures to anticipate the negative effects of rupiah weakness on rural residents. One of these measures is increasing fuel subsidies, so price increases do not overshoot. ‘The government has taken strategic preventive steps by increasing subsidies to dampen fuel price rises, allowing Indonesians to continue to enjoy the existing fuel prices,’ he said.