Is Indonesia's Economic Fundamentally Strong? Here's What a Senior Economist Says

Jakarta - Economic observers have commented on the condition of Indonesia’s financial market, which remains under pressure despite the government’s claim that the country’s economic fundamentals are still strong. Senior economist Raden Pardede stated that the discrepancy between Indonesia’s economic fundamentals and financial market conditions occurs due to a data lag, meaning economic data does not yet reflect the actual situation. “So, our economic fundamentals appear strong because there is a lag that can usually only be felt in 3-6 months or a maximum of 9 months. So, what we see with prices that have already risen and the slowdown from the weakening exchange rate, the impact is not immediate on that very day, but later,” Raden said during CNBC Indonesia’s KONEKSI programme, quoted on Friday (12/6/2026). He added that the impact of recent price increases on goods will only become apparent in about 3 to 6 months. “For example, the interest rate (BI Rate) has now been raised, the SRBI rate has gone up. That means it will affect future investment, even though it hasn’t yet, and past ones haven’t. But the impact will be felt later. It will bite in a few months,” he continued. Another example is the inflation rate, where the latest inflation data has not yet experienced a significant increase. However, the rise in goods prices will impact inflation in the subsequent period. “Indicators pointing to significant inflation are not yet visible. But market players’ expectations are already at play. It is heading in that direction,” Raden explained. Previously, National Economic Council (DEN) member Mochamad Firman Hidayat claimed that Indonesia’s current economic fundamentals are far stronger than during the 1998 crisis. He made this statement while delivering a report on Indonesia’s economic fundamentals to President Prabowo Subianto. “We from the National Economic Council indeed conveyed to the President regarding the current economic situation. Perhaps the first thing we conveyed to the President was that our economic fundamentals are in good condition,” Firman said. “In fact, far better compared to the 1998 crisis conditions. Apart from macro indicators such as still-high growth and stable inflation, one of the things we highlighted is the corporate balance sheet, which is in a very healthy position,” he asserted. Nevertheless, he assessed that the government needs to be wary of global economic uncertainty.