Smoother Roads, Easing War, and Incentives Fuel IHSG and Rupiah Rally
The Jakarta Composite Index (JCI) closed up 0.50% at 6,351.14 on Wednesday (5/8/2026), supported by positive sentiment from both domestic and international fronts.
Yesterday’s closing position was the highest since 19 May 2026, or the last two and a half months. Foreign investors recorded a net sell of Rp182.77 billion in yesterday’s trading.
Transaction value reached Rp14.93 trillion, with 406 stocks rising, 208 falling, and 178 stagnant.
The market rally was driven by Indonesia’s second-quarter 2026 economic growth data, which reached 5.29% year-on-year (YoY), surpassing market expectations of 5.12%.
This achievement boosted optimism regarding the prospects for consumption, investment, and corporate performance in the second half of the year.
Globally, the market received a boost after Wall Street again hit record highs on Tuesday. Hopes of easing US-Iran tensions and the potential reopening of the Strait of Hormuz triggered a decline in oil prices and increased investor interest in emerging market assets.
The majority of stock sectors closed in positive territory on Wednesday (5/8/2026). The healthcare sector led gains with a surge of 2.35%, followed by raw materials at 2.22% and energy at 1.61%.
Among the top gainers, shares of PT Gaya Abadi Sempurna Tbk (SLIS) soared 25.40% to Rp79 per share. PT Citra Buana Prasida Tbk (CBPE) and PT Guna Timur Raya Tbk (TRUK) also both jumped 25%, to Rp440 and Rp675 respectively.
Significant gains were also recorded by PT Tunas Alfin Tbk (TALF), which surged 24.87% to Rp1,205, and PT VKTR Teknologi Mobilitas Tbk (VKTR), which strengthened 20.27% to Rp890 per share.
In the money market, the rupiah exchange rate strengthened further against the US dollar after Statistics Indonesia (BPS) announced second-quarter 2026 economic growth that was higher than market expectations.
Declining yields indicate that government bond (SBN) prices are rising as investors hunt for them.
From the US stock market, Wall Street ended mixed on Wednesday trading, or early Thursday morning Indonesian time.
The Dow Jones index again hit a new record high, driven by hopes of reaching a peace deal with Iran, while the Nasdaq corrected after artificial intelligence (AI)-based technology stocks came under pressure.
The Dow Jones Industrial Average rose 263.18 points, or 0.49%, to 54,349.06, marking its highest-ever closing record. In contrast, the S&P 500 fell 0.17% to 7,723.52 and the Nasdaq Composite slumped 0.83% to 26,363.44.
Market sentiment came from news of progress in negotiations between Iran and Oman regarding the Strait of Hormuz.
According to Reuters sources, the draft agreement would give Iran control over ships entering the Persian Gulf through the strategic route.
Hopes of easing geopolitical tensions caused oil prices and US government bond (Treasury) yields to fall. This condition eased inflation concerns while reducing the likelihood of a Federal Reserve (The Fed) interest rate hike.
However, the AI stock rally began to lose steam. SpaceX shares plunged 13.6% after investors worried about the company’s large spending on AI development and data centres.
In fact, the first financial report since its IPO showed SpaceX’s revenue nearly doubled thanks to growth in its Starlink and AI businesses.
Pressure also came from Advanced Micro Devices (AMD), which fell 7%.
Although the company projected quarterly revenue above market expectations due to high AI demand, investors are still waiting for evidence that the AI investment boom can generate faster profit growth.
On the other hand, healthcare sector stocks were the main support for the market. Amgen surged 4.6% after second-quarter sales rose 9%, while Eli Lilly jumped 4.9% after raising its annual revenue projection. The S&P 500 healthcare sector strengthened 1.3%, making it one of the best-performing sectors of the day.
Disney shares also rose 3.6% after recording quarterly earnings that exceeded analyst expectations.
On the economic front, the ADP report showed US private sector job growth slowed in July. Meanwhile, the ISM services sector activity index rose slightly to 54.1 from 54.0 in June, but was still below market expectations of 54.5.
The data reinforced the view that the US economy remains fairly solid, but inflationary pressure from the Iran war remains a concern for investors.
Based on CME FedWatch, the probability of a Fed rate hike at the September meeting fell to 54.9%, from 58.3% a week earlier. The decline in expectations was one of the factors supporting positive sentiment on Wall Street.
Indonesian financial market players are in a state of euphoria amid the stock surge and rupiah strengthening.
This euphoria is expected to continue today.
- War Developments
Iran and Oman are reportedly close to reaching an agreement regarding the reopening of the Strait of Hormuz after five months of Iran-US conflict. In the proposal, Iran would obtain authority to oversee ships entering the Persian Gulf through the strategic route that has been the lifeblood of global energy trade.
Reuters sources said Iran wants a levy of 5%-7% of the value of passing ship cargo, while Oman proposed around 3%. The United States is said to reject such fees.
Although negotiations are said to have made significant progress, several crucial issues remain unresolved, including the definition of Iran’s ‘control’ over ship traffic and the monitoring mechanism by Gulf states.
Amid the diplomatic process, Iran also warned Gulf states that a new US attack on its territory would be met with attacks on the region’s strategic energy infrastructure.
Tehran has even increased pressure with drone and missile attacks on US allies and ships passing without permission.
The prospect of this deal has pressured oil prices over the past two days after President Donald Trump cancelled plans for further strikes on Iran. However, energy supply risks remain high after Yemen’s Houthi group announced a maritime embargo on Saudi ports and ships in the Red Sea.
- Economy Remains Solid
Statistics Indonesia (BPS) reported that Indonesia’s economic growth in the second quarter of 2026 reached 5.29% year-on-year (yoy), surpassing market expectations of 5.12%.
Although slowing compared to the first quarter of 2026, which grew 5.61%, the achievement was higher than the second quarter of 2025, which was recorded at 5.12%. With this result, the Indonesian economy managed to maintain growth above the 5% level.
Indonesia’s Gross Domestic Product (GDP) value in the second quarter of 2026 reached Rp6,552.1 trillion at current prices and Rp3,576.2 trillion at constant prices.
On a quarterly basis (quarter-to-quarter/qtq), the Indonesian economy grew 3.73%, reversing from a contraction of 0.77% in the previous quarter. This performance was also the highest second-quarter growth rate since 2022.
From the expenditure side, household consumption remained the main engine of the national economy with growth of 5.06% and a contribution of 53.32% to GDP. Strong public spending indicates maintained purchasing power.
Besides consumption, investment (GFCF) also performed impressively with growth of 6.87% and a contribution of 29.36% to GDP. Meanwhile, exports grew 4.13% with a contribution of 23.13%.
The highest growth rate came from government consumption, which surged 15.97%, reflecting the acceleration of state spending in the second quarter of this year. Consumption by Non-Profit Institutions Serving Households (NPISH) grew 6.93%.
- Number of Poor People Declines
The number of poor people in Indonesia shrank again in March 2026. In fact, this latest achievement is the lowest in nearly 30 years.
Statistics Indonesia (BPS) recorded the number of poor people at 22.93 million, or 8.07% of the total population. This figure fell by 430,000 people compared to September 2025, which was 23.36 million people with a poverty rate of 8.25%.
This decline brought the number and percentage of Indonesia’s poor to the lowest level since at least 1999. The improvement trend has also been consistent in recent years along with the declining number and rate of national poverty.
In the latest release, BPS also began presenting the poverty line in a household context. The national poverty line in March 2026 was recorded at Rp669,235 per capita per month. With an average poor household size of 4.62 people, the value is equivalent to Rp3.09 million per household per month.
BPS emphasised that the presentation of household figures is merely a conversion of the per capita poverty line and not a change in the poverty calculation method.
- Unemployment Rate Decreases
Indonesia’s unemployment rate again hit a record low in more than three decades. Statistics Indonesia (BPS) recorded the Open Unemployment Rate (TPT) in May 2026 fell to 4.65%, lower than 4.68% in February 2026.
The 0.03 percentage point decline brought Indonesia’s unemployment rate to its lowest level since 1994, or the era of President Soeharto. BPS noted that in 1994, Indonesia’s TPT was around 4.6%.
In line with that, the number of unemployed also shrank from 7.24 million people to 7.22 million people, or a decrease of about 24,000 people in the last three months.
On the other hand, the labour market showed improvement. The number of employed people increased by 522,000 to 148.19 million in May 2026. The increase was mainly supported by the addition of full-time workers, which reached 98.98 million people.
However, BPS noted that the number of underemployed still rose to 10.78 million people. This group consists of workers with working hours of less than 35 hours per week who are still looking for or willing to accept additional work.
The number of part-time workers increased by 72,000. Meanwhile, full-time workers reached 98.98 million people, up 391,000 people in May 2026.
As a note, non-full-time workers are employed persons with working hours of less than 35 hours per week, consisting of underemployed and part-time workers.
- Government Prepares Incentives
The government is preparing a number of economic incentives in the second half of 2026 to maintain economic growth above 5% and control inflation.
Coordinating Minister for Economic Affairs Airlangga Hartarto said programmes being continued include food assistance in the form of 10 kg of rice for 33.24 million beneficiaries, a 30% transport discount during the Christmas and New Year (Nataru) period, Government-Borne VAT (DTP) on economy class plane tickets, and a national internship programme for 150,000 participants.
In the tourism sector, the government is also preparing various incentives to support a number of tourism agendas and increase foreign tourist visits, including through the opening of direct flight routes with Thailand and Belarus.
The government is also preparing an incentive programme to be given to cities that are able to maintain cleanliness.
The programme was previously requested by President Prabowo Subianto to be realised in the form of a cleanliness competition between regions with a prize of Rp20 billion for five winners, and Rp10 billion for the five winners below them.
Meanwhile, Minister of Finance Purbaya Yudhi Sadewa emphasised that the government will accelerate the economy towards 6% in the second half of 2026. The method is through adding liquidity of Rp70 trillion to Himbara and lowering deposit interest rates for government institutions so that bank lending rates also fall.
The government also ensured that Pertalite prices remain safe until the end of 2026 and continues the Government-Borne Income Tax (DTP) incentive for workers earning below Rp10 million per month in certain sectors.
- Online Trader Tax Collected by E-Commerce Starting November
The government officially postponed the collection of Income Tax Article 22 of 0.5% for online traders by marketplaces until 31 October 2026. Thus, the rule that was originally effective from 1 August 2026 will only be implemented starting 1 November 2026.
The Directorate General of Taxes (DJP) emphasised that the postponement was carried out to maintain public purchasing power and support economic growth. Taxes that have already been collected by marketplaces will be returned to traders, while the appointment of marketplaces as tax collectors will be reissued.
Minister of Finance Purbaya Yudhi Sadewa said Indonesia’s economic growth of 5.29% in the second quarter of 2026 is considered not strong enough. Therefore, the government chose to postpone the policy until economic indicators such as consumption and sales show more solid improvement. The four marketplaces appointed as tax collectors are Tokopedia, Shopee, Lazada, and Blibli.
- Online Lending Platforms Required to Report Transaction Data
The Financial Services Authority (OJK) issued POJK Number 8 of 2026 to tighten supervision of the online lending (Pindar) industry. This rule requires providers to report funding transaction data completely, accurately, and on time to OJK.
The new regulation also regulates access to fund recipient information to support risk management and funding distribution, with usage limited according to provisions.
At the same time, OJK prohibits Pindar providers or associations from providing or trading user data to other parties, except to comply with statutory regulations. Violations of reporting provisions, data usage, and governance will be subject to administrative sanctions.
OJK hopes that strengthening this reporting system can improve governance, risk mitigation, and public trust in the digital lending industry.
As part of strengthening governance, this POJK requires every Pindar Provider to:
• appoint a member of the Board of Directors responsible for reporting Funding Transaction Data;
• have written policies and procedures related to the submission of transaction data and the use of Fund Recipient Information;
• conduct internal audits of the implementation of the Reporting System periodically; and
• implement internal controls, including segregation of duties in the management of the Reporting System.
- Central Government Assistance to Regional Governments of Rp22.5 Trillion Specifically for Regional Civil Servant Salaries
Minister of Finance Purbaya Yudhi Sadewa emphasised that the Rp22.5 trillion funds to be disbursed to regions are not additional Regional Transfers (TKD), but central government assistance sourced from the State General Treasurer Budget Section (BA BUN).
The funds will be distributed to around 497 regional governments experiencing fiscal pressure after the 2026 TKD cuts. The main focus is to help pay regional civil servant (ASN) salaries, including full-time and part-time PPPK.
Special Staff to the Minister of Finance Ubaidillah Amin said this assistance is expected to cover the shortage of employee expenditure budgets in regions so that there is no termination of employment (PHK) of PPPK.
The government is targeting the disbursement of the assistance to be carried out no later than next week.
- SAL in Banking Increased
Minister of Finance Purbaya Yudhi Sadewa added the placement of Excess Budget Balance (SAL) funds of Rp70 trillion in the Association of State-Owned Banks (Himbara) to strengthen banking liquidity.
Of the total funds, Rp40 trillion has been placed today, while the remaining Rp30 trillion will be disbursed next week. Bank Syariah Indonesia (BSI) and BTN each received an allocation of around Rp10 trillion, while the largest portion went to Bank Mandiri, Bank Rakyat Indonesia and Bank Negara Indonesia.
Purbaya also ensured that the SAL placement will last longer. Of the total SAL funds of Rp400 trillion placed in banks, Rp200 trillion will remain until July 2027, while the other Rp200 trillion until the end of 2026.
This step was taken by the government to maintain banking liquidity and support credit distribution to the real sector.