Purbaya: We Should Be Grateful the Economy Remains Resilient

Finance Minister Purbaya Yudhi Sadewa said Indonesia’s economic performance remains solid amidst global uncertainty. According to him, economic growth is at a high level and inflation is managed at a relatively low rate. Furthermore, monetary policy developments, especially from the United States (US), continue to be scrutinised. “We should also be grateful that, amidst the current global uncertainty, the Indonesian economy continues to show resilience,” Purbaya said during a working meeting with Commission XI of the House of Representatives on Wednesday, 10 June 2026. Purbaya stated that economic growth in the first quarter of 2026 reached 5.61 per cent, while inflation in May 2026 was controlled at 3.08 per cent year on year (yoy). The trade balance also continued to record a surplus. The performance of the manufacturing sector showed improvement in May 2026, indicating a strengthening of production activity and acting as a positive signal for sustained economic growth. Entering the second quarter of 2026, domestic economic dynamics also showed an improving trend. Consumers remain optimistic about spending, reflected in shopping activity in the Money Spending Index and Bank Indonesia’s Consumer Confidence Index. According to Purbaya, economic activity grew positively, reflected by increased sales of cars, motorcycles, electricity and cement. Meanwhile, the manufacturing sector became expansionary again after experiencing pressure in April 2026. Based on data presented during Purbaya’s briefing, the manufacturing index in May 2026 was at 50.0, indicating a stabilisation in the manufacturing sector’s performance. The trade balance also recorded a surplus for 72 consecutive months. From January to April 2026, the trade surplus reached US$5.64 billion. Imports are still said to be dominated by productive commodities in the form of capital goods and raw materials. Credit growth in April 2026 was recorded at 10.0 per cent yoy, driven by investment credit growth of 19.5 per cent yoy. Inflation in May 2026 was recorded at 3.08 per cent yoy or 0.26 per cent month to month (mom). Indonesia’s foreign exchange reserves in May 2026 reached US$144.9 billion, equivalent to 5.6 months of imports. Money supply (non-adjusted M0) in May 2026 grew 14.8 per cent yoy. Foreign direct investment in the first quarter of 2026 reached Rp250 trillion, growing 8.5 per cent yoy. Meanwhile, foreign capital flows recorded a net inflow of Rp40.4 trillion up to 5 June 2026. Purbaya said the rupiah exchange rate up to early June 2026 still faced pressure influenced by global sentiment, risk-off conditions in financial markets, as well as pressure from travel transactions and domestic financial transactions. Data presented showed the rupiah exchange rate against the US dollar up to 8 June 2026 was at Rp18,039 per US dollar. According to Purbaya, the rupiah’s depreciation until early June was primarily triggered by global sentiment and risk-off conditions in financial markets. Nevertheless, Purbaya assessed that the current rupiah level potentially reflects an overshooting or undervalued condition. On the other hand, domestic fundamentals are still considered strong, reflected by adequate foreign exchange reserves, a manageable current account deficit (CAD), inflation within the target range, and a pro-stability response from Bank Indonesia. The government is optimistic that more solid synergy and coordination between fiscal, monetary and financial sector policies, accompanied by improved governance of export proceeds and deepening of financial markets, will strengthen the supply of foreign currency domestically and increase investor confidence. Thus, Purbaya said, the rupiah is expected to strengthen gradually in the second half of 2026. Foreign capital flows also showed significant improvement in the second quarter of 2026, especially in Government Securities (SBN) and Bank Indonesia Rupiah Securities (SRBI) instruments. Although the stock market still recorded outflows, overall investor interest in domestic financial instruments remained maintained.