Luhut: Indonesia Will Not Collapse Despite Rupiah and IHSG Slump

National Economic Council (DEN) Chairman Luhut Binsar Pandjaitan addressed the pressures affecting Indonesia’s economy, including the weakening rupiah against the US dollar and a pressured Jakarta Composite Index (IHSG) due to heavy capital outflows.

Nevertheless, he affirmed Indonesia’s economic fundamentals remain robust enough to withstand global volatility. This is evident from the fiscal deficit of Rp240.1 trillion, or 0.93% of GDP, as of 31 March 2026.

“Despite global challenges and currency volatility, Indonesia’s economic fundamentals remain strong. I believe this has been proven, and we are grateful to our economic team. The fiscal deficit is currently around 1%,” Luhut said at an ASEAN Regional Economic Outlook and Fiscal Policy event at his office in Central Jakarta on Monday, 25 May 2026.

Luhut further recounted his recent visit to Singapore, where he conveyed his views on Indonesia’s economy to major investors. He stated that Indonesia has never defaulted on its financial obligations.

He therefore urged investors to invest in Indonesia, asserting that despite current pressures, the national economy will not collapse.

“I told them that, based on history, the Indonesian government has never failed to meet its financial responsibilities. For me, this is the right time to invest in Indonesia because it will not collapse. It may take time to recover, but I believe we can bounce back. I am confident about this,” he stressed.

Additionally, Luhut expressed confidence that Indonesia’s economic growth would improve, primarily driven by rising domestic demand. In this context, one programme to boost domestic demand is the free nutritious meal (MBG) initiative.

“High growth is driven by strong domestic demand, which is indeed the case. I believe the MBG programme is a very good project. The only thing we might need to evaluate is how to implement it,” Luhut said.