Global Uncertainty Rises, Indonesia's Economic Fundamentals Remain Solid
The positive performance of non-oil and gas commodity trade continues to serve as a pillar for the Indonesian economy. As the international trade landscape shifts and global geopolitical uncertainty increases, many nations are being driven to strengthen their domestic economic foundations. In such conditions, fiscal stability, the resilience of domestic consumption, and the ability to maintain investor confidence are key factors in sustaining economic growth. For Indonesia, strong domestic demand and prudent economic policy management are considered the primary supports amidst evolving global challenges. This view was shared by the Deputy Finance Minister of the Republic of Indonesia, Suahasil Nazara, during the UBS Asian Investment Conference (AIC) 2026, held in Singapore and Hong Kong from 25-29 May 2026.
In this international investment forum, Suahasil outlined Indonesia’s strategy for facing changes in global trade dynamics and geopolitical developments affecting the world economy. According to him, the Indonesian economy is currently supported by several strong fundamental factors, including household consumption, investment, the manufacturing sector, and services.
“The Indonesian economy continues to be supported by strong domestic drivers, including household consumption, investment, manufacturing, and services. At the same time, fiscal discipline remains the anchor for our policy credibility. The maximum deficit limit of 3% is not merely a fiscal rule, but a signal of Indonesia’s commitment to prudent and sustainable economic management,” Suahasil stated.
He added that the Indonesian government bond market remains resilient amidst global volatility, supported by policy credibility and a relatively strong domestic investor base.
“Even amidst global volatility, the Indonesian government bond market remains tough, supported by policy credibility and a stable domestic investor base. The State Budget (APBN) will continue to function as a shock absorber to protect public purchasing power and maintain macroeconomic stability,” he said.
The UBS Asian Investment Conference is one of the largest investment forums in the Asian region, bringing together policymakers, global investors, business players, and academics to discuss economic developments, financial markets, and long-term investment trends. This year’s conference recorded the participation of over 6,000 participants from various countries and facilitated more than 3,000 meetings between investors and both public and private companies.
Joshua Tanja, Head of UBS Indonesia Research at UBS Investment Bank, stated that Indonesia still possesses positive growth prospects despite global uncertainty.
“For Indonesia, UBS is optimistic that growth prospects will remain stable, supported by resilient domestic demand, prudent fiscal and monetary policies, and sustained momentum in the manufacturing and services sectors. Household consumption also benefits from targeted fiscal support, which is expected to sustain growth in the short term,” he noted.