Indonesia's Economic Fundamentals Are Strong, DPR Says IHSG Slumped Because of This

Jakarta, CNBC Indonesia - The Jakarta Composite Index (IHSG) came under pressure yesterday, Wednesday (4 March 2026), after slipping sharply by as much as 5% to the 7,500 level. Nevertheless, as of today, the index in early trading opened up 185 points, or 2.45%, to 7,762.33.

Chairman of Commission XI of the DPR, Mukhamad Misbakhun, said the movement yesterday was more driven by sentiment, so the pressure was short-term. For example, sentiment from international rating agencies that trimmed Indonesia’s debt or credit outlook.

“The stock market, capital market, and government securities (SBN), are under pressure from sentiment,” Misbakhun said at the CNBC Indonesia Market Outlook 2026 forum in the Main Hall of the Indonesia Stock Exchange, quoted Thursday (5 March 2026).

Misbakhun noted that in an increasingly globalised era, the financial sector has an extremely high sensitivity to sentiment. Even the slightest issue, even if elemental, can directly affect perceptions and investment decisions.

Therefore, maintaining the credibility and integrity of the Indonesia Stock Exchange to produce a resilient IHSG, in his view, requires government communication that better demonstrates how strong Indonesia’s economic fundamentals are.

“Imagine our economy’s fundamentals are stable, sustained for a long period above 5%, then we have strong foreign exchange reserves, we have a positive credit balance, a positive current account, and a contained budget deficit,” he said.

Indonesia’s financial sector governance he asserts is also very good, marked by a clear separation of powers between the fiscal sector (Ministry of Finance), monetary (Bank Indonesia), and financial supervision (OJK). However, this good governance must be tested in facing market anomalies.

“So the fundamentals are so strong in this macroeconomic structure but still influenced by sentiment,” he asserted.

“Thus, in my view there should be strong communication. If I say, when the three pillars of Indonesia’s economic strength are pressured (stock market, rupiah, and SBN), then our brand in the crisis. We are risking the name of Indonesia,” he said.