IHSG Closes at 6,401.89, Boosted by Prabowo's Fiscal Discipline and Growth Targets
The Jakarta Composite Index (IHSG) of the Indonesia Stock Exchange (BEI) closed significantly higher on Friday afternoon, as market participants responded to the fiscal discipline and economic growth targets of President Prabowo Subianto’s administration for 2027.
The IHSG closed up 100.12 points, or 1.59%, at 6,401.89. Meanwhile, the LQ45 index of 45 leading stocks rose 5.12 points, or 0.82%, to 632.28.
“The narrowing deficit, coupled with expectations of 6% economic growth next year, certainly meets the expectations of market participants and investors,” said Maximilianus Nico Demus, Associate Director of Research and Investment at Pilarmas Investindo Sekuritas, when contacted by ANTARA in Jakarta on Friday (14/8).
According to Nico, there was an interesting report in President Prabowo Subianto’s speech on Friday, in which the government targeted narrowing the budget deficit in 2027, following substantial spending to run priority programmes this year.
In his speech, President Prabowo Subianto stated that the deficit in the 2027 Draft State Revenue and Expenditure Budget (RAPBN) is targeted at 2.40% of gross domestic product (GDP), down from 2.68% of GDP in the 2026 State Budget. Budget financing in 2027 is planned at Rp671.2 trillion, down from the planned financing of Rp689.1 trillion in the 2026 State Budget.
“This is what ultimately allowed the IHSG to close up 1.59%, which is also the hope of market participants and foreign investors who are concerned about our fiscal discipline. Interestingly, Mr Prabowo also said that fiscal discipline must be present in every rupiah spent,” said Nico.
State expenditure in 2027 is planned at Rp4,097.2 trillion, up from Rp3,842.7 trillion in the 2026 State Budget. On the other hand, state revenue is estimated to reach Rp3,426 trillion, up from Rp3,153.6 trillion in the 2026 State Budget.
Meanwhile, inflation in 2027 will be maintained at around 2.5%, the 10-year Government Securities (SBN) interest rate is estimated at 6.9%, and the rupiah exchange rate is projected at around Rp17,500 per US dollar.
Furthermore, the Indonesian crude oil price is estimated at US$75 per barrel, with oil lifting targeted at 610,000 barrels per day and gas lifting at 954,000 barrels of oil equivalent per day.
With stronger growth and an effective state budget, poverty in 2027 is targeted to fall to a range of 6.0% to 6.5%, compared with the 2026 State Budget target of 6.5% to 7.5%.
The open unemployment rate in 2027 is targeted to fall to a range of 4.30% to 4.87%, down from 4.44% to 4.96% in 2026. In addition, the Gini ratio is targeted to improve to 0.362 to 0.367 from this year’s target of 0.377 to 0.380, and the human capital index is set to increase to 0.575.
Opening lower, the IHSG moved into positive territory until the close of the first trading session. In the second session, the IHSG remained in the green zone until the close of stock trading.
Based on the IDX-IC Sectoral Indices, all eleven sectors strengthened, led by the energy sector which rose 2.6%, followed by the transportation & logistics and infrastructure sectors which rose 1.55% and 1.53% respectively.
The stocks that experienced the largest price increases were TEBE, YPAS, AGAR, STAR, and BYAN. Meanwhile, the stocks that experienced the largest price declines were BAIK, BABY, GRPM, DART, and BACH.
Share trading frequency was recorded at 1,729,000 transactions with a total of 31.12 billion shares traded, worth Rp12.43 trillion. A total of 354 shares rose, 277 shares fell, and 332 shares were unchanged.
Regional Asian stock markets this afternoon included the Nikkei index rising 0.62% to 68,732.00, the Shanghai index rising 0.01% to 3,927.18, the Hang Seng index rising 1.10% to 25,116.85, the Kospi index rising 2.42% to 6,977.97, and the Straits Times index rising 0.14% to 5,727.79.