IDX Plummets, Senior Indef Economist Urges Government to Maintain Market Confidence

The Indonesian capital market is facing significant pressure, triggering concerns regarding national economic stability. The Indonesia Composite Index (IHSG) has reportedly fallen from the 9,200 level to 5,900, approaching conditions seen during the 2008 global financial crisis. This downturn has been accompanied by a decline in the share prices of several major banks, including PT Bank Central Asia Tbk (BCA). The drop in share prices is attributed to the outflow of foreign investor funds from the domestic market due to waning confidence in economic prospects and government policies.

Senior economist at Indef, Didik J. Rachbini, has warned the government not to take the situation lightly. Although Bank Indonesia (BI) has intervened in the financial markets, the rupiah exchange rate remains under pressure, and the stock market has yet to show a strong recovery. “The economy is not just about good growth figures on paper. What is collapsing right now is investor confidence. We need a sense of crisis from the government,” Didik stated in a brief message on Saturday (6/6/2026).

Didik noted that the current situation echoes messages frequently delivered by the 6th President of Indonesia, Susilo Bambang Yudhoyono (SBY). According to him, economic recovery cannot succeed without legal certainty, policy consistency, and prudent management of the State Budget (APBN). He emphasised that if the government continues to allow state spending to swell to fund new programmes without adequate evaluation, while the House of Representatives (DPR) merely acts as an approving body, investors may continue to distance themselves from the domestic market. The impact of this foreign capital outflow, he continued, could increase pressure on the rupiah exchange rate due to high demand for the US dollar. “The key lies in legal certainty and budget governance. Only when market confidence returns can the people’s economy recover,” said Didik.