Indonesia to crack down on illegal exploitation of resources, president says 

Indonesia will launch a broader crackdown on the illegal exploitation of natural resources after a survey of palm plantations found that 3.7 million hectares (14,300 square miles) had broken the law, President Prabowo Subianto said on Friday. 

He added that a total of 5 million hectares of palm plantations have been under scrutiny. 

He made the comments in his first state of the nation speech, delivered as the country - the world's largest producer and exporter of palm oil - celebrates 80 years of independence this weekend. Prabowo won the election last year, and took power in October.  

Prabowo, speaking in parliament, said the government had already seized 3.1 million hectares of illegal plantations with the help of the military. 

"We have used the military to accompany the teams that took over the plantations because there often is resistance," he said. 

He said his government is also planning a crackdown on mining, adding that they had received reports of as many as 1,063 illegal operations throughout the vast, mineral-rich archipelago. He did not specify what type of mines or the commodities they were extracting. 

Prabowo added that the government would take action against businesses found to be hoarding and exploiting key commodities in Indonesia. 

Large-scale rice mills would also be forced to obtain government permits to ensure rice quality and affordability, he said. 

Source: Reuters 
 

Retail sales spring back in July after a nine-month lull 
 
 

Excluding the March data, when consumption typically spikes during Idul Fitri, boosting retail sales, annual retail sales index growth has remained weak since October of last year. 
Retail sales in July are projected to grow after nine months of sluggish performance, driven by increased commerce in certain goods. 

According to preliminary data published by Bank Indonesia (BI) on Monday, the retail sales index (RSI) for July is estimated to have inched up to 222.5, marking a solid 4.8 percent year-on-year (yoy) increase from 212.4 in March of last year. 

BI spokesperson Ramdan Denny Prakoso said in a press statement released alongside the data that the annual growth “chiefly originated from” sales of spare parts and accessories as well as food, beverages and tobacco. 

Excluding the March data, when consumption typically spikes during Idul Fitri, boosting retail sales, annual RSI growth has remained weak since October of last year. The highest yearly growth during that period was only 2 percent in February, with most other months posting gains below 2 percent. 

The index performed particularly poorly in November and January, while the weakest growth in the nine-month period was recorded in April, when it contracted by 0.3 percent. However, that reading was still better than the 2.7 percent contraction seen in the same month last year. 

On a monthly basis, July’s projected RSI fell 4 percent from June, which BI attributed to the end of holidays and collective leave during religious festivities, when retailers often launch mid-season sales. 

Sales of information and communication devices continued to weigh on overall growth, posting more double-digit contraction since March, including 17.1 percent in July. 

In contrast, sales of vehicle fuel recorded a robust 13 percent yoy growth in July, followed by spare parts and accessories (7.5 percent) and food, beverages and tobacco (6 percent), as well as culture and recreation (1.4 percent). 

Survey respondents expected inflationary pressure to ease in September and decline further in October, before rising again in the following two months due to Christmas and New Year festivities. 

They were less optimistic about sales over the next three months but anticipated a steady rebound leading to a peak in December. 

This sentiment aligns with the trend seen in the consumer confidence index (CCI), a separate survey by the monetary authority released on Friday. 

The CCI rose slightly to 118.1 points in July from 117.8 in June, largely reflecting improved expectations for the future. The consumer expectations subindex, which measures perceptions of the economy over the next six months, edged up to 129.6 points from 128.9. 

Of its three components, income expectations saw the largest improvement, job availability expectations rose slightly, while business activity expectations declined significantly. 

Statistics Indonesia (BPS) announced on Aug. 5 that gross domestic product (GDP) grew 5.12 percent yoy in the second quarter of 2025, beating the 4.8 percent market consensus. 

Household spending, which accounts for the lion’s share of GDP, was up 4.97 percent yoy in the second quarter, marginally higher than 4.95 percent logged in the first quarter of this year. The boost was partly due to a consumer stimulus package rolled out in the second quarter to increase spending during the school holiday, including discounted transportation fees. 

Source: The Jakarta Post 

Indonesia, Canada to Sign Trade Pact This Year 

Indonesia is hoping to ink a trade pact with Canada later this year, although the two governments have yet to set a date, according to a senior official on Monday. 

Both countries had substantially concluded the negotiations for their bilateral comprehensive economic partnership agreement (CEPA) last December. Under this deal, Canada agrees to drop a significant chunk of tariffs on Indonesian goods. Jakarta will also enjoy a similar treatment for its Canada-bound exports. 

The Southeast Asian economic giant’s market diversification efforts have been in full swing, even more so after the US country-specific tariff hikes hit the globe.  

Jakarta had just sealed a trade in goods agreement with Peru on Monday. It is now eyeing a similar pact with Canada in 2025. The agreement with Ottawa will also be more comprehensive, as the document also deals with investment facilitation. 

“We will soon tap into the North American market with the upcoming [Indonesia-Canada] CEPA,” Djatmiko Bris Witjaksono, a director-general at the Trade Ministry, told a news conference in Jakarta. 

“We are still looking for the right time to ink the document. Because both of our heads of state will witness the signing,” Djatmiko said, alluding to a future meeting between President Prabowo Subianto and Canadian Prime Minister Mark Carney. 

As part of the agreement, Indonesia will see a trade liberalization of up to 90.5 percent of the total tariffs for goods entering the Canadian market. Indonesia’s Canada-bound exports totaled $1.4 billion in 2024. 

Indonesia-Canada trade hit nearly $3.6 billion last year, with Jakarta running a $693.2 million deficit. Bilateral trade totaled nearly $2.3 billion between January and June 2025, representing a 27% increase from around $1.8 billion over the same period in 2024. Indonesia’s first-half trade deficit widened from $398.1 million to $497.8 million, according to the ministry's statistics. 

Source: Jakarta Globe