At UGM FGD, Coordinating Minister Airlangga Highlights Indonesia's Economic Strength and Trade Diplomacy

Entering the second quarter of 2026, Indonesia’s economy is in a strong position. A combination of controlled inflation, a trade surplus for 70 consecutive months, and high consumer confidence create a solid foundation for economic growth. Meanwhile, the financial sector continues to show solid performance, reflected in the growth of bank deposits and stable credit expansion. “Our poverty rate has dropped to 8.25 percent. Our Gini ratio has decreased, and unemployment has also fallen. Job creation throughout 2025 reached 2.71 million new workers,” said Coordinating Minister (Menko) for Economic Affairs Airlangga Hartarto in a press release received by Kompas.com on Wednesday (15/4/2026). The statement was delivered by Airlangga at the Focus Group Discussion (FGD) on The Agreement on Reciprocal Trade (ART) between Indonesia and the United States at the Senate Hall of Universitas Gadjah Mada (UGM), Yogyakarta, on Wednesday. In line with the strengthening of these fundamentals, Indonesia’s global economic diplomacy achievements, especially during President Prabowo Subianto’s administration, continue to expand through various agreements and strategic partnerships. At the same time, tariff negotiations with the United States (US) open up opportunities for increasing exports of labour-intensive industries and job creation. The government is also continuously strengthening bilateral economic cooperation with various partner countries. Several agreements have been finalised, including with Japan, Pakistan, Palestine, Chile, Australia, Mozambique, Korea, Iran, Peru, Canada, and Tunisia. Meanwhile, several negotiations are still ongoing, including with the Southern Common Market (Mercado Común del Sur/Mercosur), the Gulf region (Gulf countries), as well as Bangladesh, Sri Lanka, Morocco, Turkey, and Uzbekistan. Regarding Indonesia’s trade relations with the US, Airlangga stated that the US has consistently been the contributor to Indonesia’s highest trade surplus as well as one of the largest export destinations for Indonesia. “Why is America important? Because our highest positive trade balance comes from America. America imports Indonesian manufactured products such as palm oil, electronics, shoes, textiles, furniture, and others,” he said. A series of bilateral meetings have resulted in tariff reductions for several Indonesian products, from previously 32 percent to around 19 percent for certain commodities, as well as opportunities for tariff exemptions (0 percent) for 1,819 selected products. This policy provides protection as well as a boost to domestic labour-intensive industries that absorb around 5 million workers.