Indonesia Fortunate to Have Solid Economy, Consumer Spending Proves Saviour

Senior Deputy Governor of Bank Indonesia Destry Damayanti has stated that Indonesia is fortunate to have a solid economy, supported by strong domestic consumption amidst global turmoil. Indonesia’s economy grew by 5.61% in the first quarter of 2026, primarily driven by a 5.52% increase in consumer spending, which accounts for 54.36% of GDP. According to Destry, this is a key asset for Indonesia in facing global economic upheaval. “We are fortunate to have a relatively solid domestic economy compared to other countries. This is proven by our economic growth in the first quarter, which was an impressive 5.6%, while other nations are still struggling,” she told CNBC Indonesia. “We are fortunate that consumer spending, which supports our GDP, can remain resilient in these conditions,” she added. She considers this resilient household consumption a major factor in Indonesia’s potential to continue attracting investors to inject capital domestically, despite high economic uncertainty caused by conflicts in various regions. For instance, the uncertainty triggered by the closure of the Strait of Hormuz, a vital global oil distribution route, as a result of the war in the Middle East between Iran and the United States. This disruption has already caused world crude oil prices to surge past US$100 per barrel, and global inflation is expected to rise. Therefore, Destry said Bank Indonesia continues to strive to maintain Indonesia’s external resilience to safeguard this domestic growth engine. One such effort is through the monetary policy of raising the BI Rate. If external shocks are not anticipated, the impact could reduce people’s purchasing power, especially due to declining export growth and significant pressure on the rupiah exchange rate against the US dollar. “So this certainly also warrants our vigilance because it will eventually be reflected in rising inflation. That is why we previously raised interest rates as a stabilisation measure for the rupiah, and also as a forward-looking step to keep inflation in check,” Destry asserted.