Expert: Export Surge Demonstrates Positive Response to Downstreaming Programme
Halim Alamsyah, an expert from the Prasasti Center for Policy Studies, believes that Indonesia’s export surge reflects a positive response from the manufacturing sector and the success of the downstream programme in strengthening foreign exchange reserves.
Statistics Indonesia (BPS) recorded that Indonesia’s export value from January to April 2026 reached US$92.15 billion, representing a year-on-year growth of 5.48 per cent. In April 2026 alone, exports surged by 21.98 per cent compared to the same period the previous year. This increase was primarily driven by processed industrial products, which grew by 29.07 per cent, alongside downstream products such as processed nickel to China, which rose by 73.6 per cent, and crude palm oil (CPO), which increased by 20.4 per cent.
“The Prasasti Center for Policy Studies views this Indonesian economic picture as a fairly positive development in terms of production and exports, yet it leaves several vulnerabilities that demand vigilance,” said Halim Alamsymah in a statement in Jakarta on Monday.
On the other hand, inflation in May 2026 was recorded to have risen to 3.08 per cent annually from 2.42 per cent in April 2026, breaching the 3 per cent level once again. Halim assessed that the increase in exports was not only influenced by the depreciation of the rupiah but also demonstrated a positive response from the manufacturing industry and sectors related to the downstream programme. Nevertheless, rising inflationary pressure and a shrinking trade surplus necessitate government attention.
“The export acceleration in April, which jumped by almost 22 per cent, and the increase in processed nickel exports to China by up to 73 per cent, is news worth celebrating. This is proof that downstreaming is able to increase domestic value-add, and we hope it will also increase foreign exchange supplies precisely when our trade surplus is thinning,” he added.
Prasasti also views the formation of PT Danantara Sumberdaya Indonesia (DSI) as a good strategic step to continue driving exports and nurturing national foreign exchange. However, this requires appropriate follow-up measures to ensure Indonesia does not lose its momentum for economic improvement.
According to Halim, the rise in inflation was not only triggered by supply disruptions and volatile food components but was also influenced by the weakening of the rupiah exchange rate. Therefore, inflation control and exchange rate stability require greater attention so that the space to drive economic growth does not become further restricted.
“The government’s strategy to continue driving economic activities will be tested by the market through the ability of the government and Bank Indonesia to maintain rupiah and inflation stability. Steps to increase the supply of foreign exchange domestically and the coordination of macroeconomic policies to maintain Indonesia’s economic fundamentals are seen by economic actors as critical amidst the high economic uncertainty currently prevailing,” he stated.
Meanwhile, the Policy and Program Director of Prasasti, Piter Abdullah, assessed that the current rise in inflation does not reflect an overheating economy. “If we analyse it, our inflation drivers are volatile foods such as red chillies, tomatoes, and shallots. These are seasonal in nature, related to supply and weather, rather than a surge in domestic demand. Our core inflation remains low. Therefore, the current price pressure is temporary, not structural,” explained P2ter.
BPS data shows that red chillies rose by 25.64 per cent, tomatoes by 9.82 per cent, and shallots by 6.65 per cent, acting as the main contributors to inflation. According to Piter, the government’s policy of maintaining subsidised fuel prices has also helped dampen price pressures.
From a trade perspective, imports of raw materials and auxiliary goods in April 2026 increased by 24.56 per cent annually. Piter assessed that this increase in imports is actually a positive signal for economic activity. “If what is rising is the import of raw materials and capital goods, it is actually good news. Raw materials and machinery are imported because entrepreneurs are preparing for production, and they are producing because they foresee future demand. So, while the shrinking surplus is not an ideal condition, the cause is not frightening. This is not a weakening economy, but an economy in motion,” said Piter.
Regarding the exchange rate, Piter assessed that the weakening of the rupiah is influenced by various factors, but one of the most dominant is the decline in confidence in the domestic currency. “The factors are mixed; we cannot point to just one. But what I believe is the biggest influence now is the erosion of confidence in the rupiah. Once this sentiment forms, the demand for dollars increases. Even those who do not actually need dollars participate in buying. The elements of speculation and psychology are what deepen the rupiah’s weakness beyond what can be explained by fundamentals alone,” he explained.
Overall, Piter views the latest BPS data as still showing relatively good economic conditions, although not yet fully balanced. Export performance and the success of downstreaming are positive assets for the economy, but rising inflation, the shrinking trade surplus, and the widening oil and gas deficit still require vigilance. He emphasised the importance of policy consistency and the synchronisation of fiscal and monetary policies to ensure that improvements in the export sector can drive increased confidence in the national economy more broadly.