Investors Still Eyeing Indonesia, But Testing Government Policy Consistency
JAKARTA, KOMPAS.com - Pressure on the Rupiah and increasing global market concerns have not diminished Indonesia’s appeal as an investment destination.
Global investors still view Indonesia as an important market. However, they are beginning to test the consistency of government policies, especially in fiscal management and regulatory certainty.
Economist from the Indonesia Strategic and Economic Action Institution (ISEAI), Ronny P Sasmita, said that global investors currently view Indonesia through two lenses amid global economic turmoil.
On one hand, investors are monitoring external pressures. These factors include still-high global interest rates, the strengthening of the US dollar, the slowdown in the Chinese economy, and geopolitical uncertainty.
This pressure is making capital flows more sensitive to risk.
“As a result, the Rupiah is also under pressure. But on the other hand, Indonesia is still seen as relatively more resilient compared to many other emerging markets because its fundamental base has not collapsed,” Ronny told Kompas.com on Friday (15/5/2026).
A number of key indicators still support investor confidence in the domestic economy. These indicators include relatively controlled inflation, economic growth in the range of 5 percent, a moderate government debt-to-gross domestic product (GDP) ratio, and continued strong domestic consumption.
“What is being tested now is not only macro figures, but also the consistency of policies and the government’s credibility in maintaining fiscal stability and business certainty,” he said.
Ronny believes that Indonesia is still one of the most prospective countries in Asia for medium- and long-term investment.
The main attraction of Indonesia comes from its large domestic market, demographic dividend, abundant strategic natural resources, and relatively stable geopolitical position compared to other developing countries.
“Many global investors see Indonesia as a future manufacturing and downstream hub, especially for the critical minerals, electric vehicles, new energy, food, and digital economy sectors,” he said.
According to Ronny, legal certainty, consistent regulations, efficient bureaucracy, and fiscal discipline are now the main factors in investment decisions.
“Indonesia is still worth it, but its attractiveness could quickly decline if the government changes the rules too often, increases populist spending without clear productivity, or creates policy uncertainty,” said Ronny.
Ronny said that the biggest concern for investors at this time is not just the weakening of the Rupiah. Investors are more concerned about the uncertainty of the government’s policy direction.
“Investors today are more afraid of policy inconsistency than just the weakening of the Rupiah,” said Ronny.
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