Geopolitical Tensions Escalate as OJK Warns of Surging Global Financial Market Volatility
Jakarta, VIVA — Acting Chairman of the Board of Commissioners of the Financial Services Authority (OJK), Friderica Widyasari, known as Kiki, has stressed that amid the persistently high global uncertainty currently prevailing, Indonesia’s financial sector must remain vigilant and closely monitor developments in both the global and domestic economies.
Speaking at the ‘Economic Outlook 2026’ webinar, Kiki noted a trend of increasing downside risks globally, driven by escalating geopolitical and geo-economic tensions that have become a key focus for market participants worldwide.
“Global downside risks continue to rise, in line with the ongoing fragmentation of geopolitical and geo-economic landscapes, as well as growing market concerns over the potential formation of asset price bubbles in the artificial intelligence sector,” Kiki said on Thursday, 19 February 2026.
Given these conditions, Kiki stated that there had been a surge in volatility across global financial markets, which many countries would respond to by tightening their monetary policies.
Consequently, the impact is believed to weigh on global economic growth prospects, potentially depressing them to their lowest levels for an extended period.
“These conditions of global geopolitical uncertainty will inevitably drive increased volatility in global financial markets, prolong the phase of tight monetary policy, and push global economic growth prospects below their long-term historical averages,” she said.
Nevertheless, Kiki emphasised that amid these various global challenges, Indonesia should be grateful that national economic growth has consistently hovered around 5 per cent. Indeed, throughout 2025, the national economy still managed to grow by 5.11 per cent on an annual basis.
“And this is higher than the two preceding years. We also observed that in the fourth quarter of 2025, Indonesia’s economic growth reached 5.39 per cent year-on-year, making it one of the highest among G20 member nations,” Kiki said.
In line with this, Kiki added that data from the Central Statistics Agency (BPS) also showed that the national financial services sector grew by 7.92 per cent year-on-year during the same period, representing the highest growth rate since the second quarter of 2021.