Indonesia Still ‘Bright Spot’ in Troubled World Economy: IMF

The International Monetary Fund (IMF) has praised Indonesia for maintaining economic growth and keeping inflation under control despite pressures from global external factors, while emphasizing that the country needs an appropriate policy mix to secure future stability. 

Following its 2025 Article IV consultations, the IMF stated in a press release on Saturday, November 15, 2025, that “Indonesia remains a global bright spot, with strong economic growth amid a challenging external environment, and inflation expected to remain comfortably in the target range.” 

“Indonesia’s economy has shown resilience amid adverse shocks,” IMF mission chief for Indonesia Maria Gonzalez said, noting that Indonesia’s gross domestic product (GDP) was projected to grow 5% in 2025 and 5.1% in 2026. 

Gonzalez pointed to trade tensions, prolonged uncertainty, and global financial market volatility as key external risks to this outlook. On the domestic front, she said that large policy shifts, if not supported by robust guardrails, could heighten vulnerabilities. Upside risks include stronger structural reforms and positive spillovers from higher growth among key trading partners. 

Her team projected Indonesia’s fiscal deficit for 2025 to close at 2.8% of GDP, aligning with the government’s 2.78% projection announced mid-year and remaining below the legally mandated ceiling of 3% of GDP. As of the end of the third quarter, the deficit stood at 1.56% of GDP, with Finance Minister Purbaya Yudhi Sadewa stating on Friday, November 14, 2025, that some state institutions had opted to return unspent budgets. 

The IMF forecasts a slight increase in the fiscal deficit to 2.9% of GDP in 2026 based on more conservative revenue and growth assumptions than those used in the 2026 state budget, which targets a 2.68% deficit. 

Gonzalez stated that maintaining fiscal risks “well-contained” would require prudence, strong safeguards, and rigorous oversight of quasi-fiscal operations. She recommended stronger revenue mobilization, improved spending efficiency, and greater focus on high-quality expenditures to strengthen growth support. 

She also noted Indonesia’s ambition to become a high-income nation by 2045, requiring higher sustained growth supported by macroeconomic policies and expanded state-led initiatives. 

“Raising long-term growth durably and inclusively will require ambitious horizontal structural reforms, including on infrastructure, deregulation, trade barriers, and global integration,” Gonzalez said. 

The IMF’s conclusions followed meetings with officials from the Indonesian government, Bank Indonesia, the Financial Services Authority (OJK), public institutions, private sector representatives, and civil society between November 3 and November 12, 2025. 

Source: Jakarta Post 
 

Bank Indonesia Holds Benchmark Rate at 4.75% to Stabilize Rupiah

Bank Indonesia (BI) has opted to hold its benchmark interest rate, known as the BI Rate, steady at 4.75%. The central bank finalized this decision during the Board of Governors Meeting concluded on November 19, 2025.

"The Board of Governors Meeting on November 18 and 19, 2025, decided to maintain the BI Rate at 4.75%," announced BI Governor Perry Warjiyo during a virtual press conference on Wednesday, November 19, 2025.

BI also maintained the deposit facility interest rate at 3.75% and the lending facility interest rate at 5.5%.

According to Perry, the decision aligns with the central bank's short-term strategy focused on stabilizing the rupiah exchange rate and attracting foreign investment in anticipation of increasing global uncertainty. This rate stability follows a cumulative 150 basis points (bps) cut to the BI Rate implemented between September 2024 and October 2025. This marks the second consecutive month BI has held the rate steady at 4.75%.

Market Expectations and Future Cuts

The decision was widely anticipated by the market. Chief Economist of Citi Indonesia, Helmi Arman, had correctly predicted that Bank Indonesia would maintain the benchmark interest rate, citing several factors.

First, Helmi highlighted the tight yield spread between Indonesian bonds and U.S. bonds. Second, he noted continued capital outflow from the domestic market. "In early November, there was still an outflow from the bond and SRBI (Bank Indonesia Rupiah Securities) markets," Helmi stated when meeting reporters in Jakarta on Tuesday, November 18, 2025.

Nevertheless, Helmi believes the benchmark interest rate could still be lowered twice more. He projected the first decrease to 4.50% would occur in December, followed by a subsequent cut to 4.25% in March 2026. This prediction is based on the expectation that core inflation will remain stable and fall within BI's target range of 2.5% (plus or minus 1%).

Source: Tempo 

Indonesia, Jordan to Expand Fertilizer Partnership

Indonesia and Jordan are moving forward with a long-term fertilizer production partnership aimed at securing supply chains and supporting national food programs, Investment Minister and Danantara CEO Rosan Roeslani announced on Saturday, October 18, 2025. 

Rosan said Indonesia already has a planned joint venture in phosphate, a key raw material for fertilizer, which will be expanded in collaboration with Jordan to strengthen Indonesia’s chemical industry. 

Speaking after accompanying President Prabowo Subianto during a bilateral meeting with Jordan’s King Abdullah II in Jakarta, Rosan emphasized that fertilizer remains a critical component of Indonesia’s agricultural sector. 

“Deeper cooperation with Jordan is expected to attract investment and strengthen upstream self-sufficiency, ensuring a stable and competitive domestic fertilizer supply,” Rosan said. 

He added that both countries are committed to establishing a robust and sustainable fertilizer security framework. 

The Agriculture Ministry previously reported that Indonesia and Jordan are exploring broader cooperation in agricultural technology to enhance food security and operational efficiency. 

Agriculture Minister Andi Amran Sulaiman highlighted Jordan’s global role as a major producer of fertilizer inputs such as potash and phosphate, presenting significant opportunity for Indonesia’s fertilizer industry. During discussions with Jordanian Ambassador Sudqi Attalah Al Omoush in Jakarta on May 14, 2025, Sulaiman proposed forming a joint company to supply fertilizer to Indonesia, Jordan, Southeast Asia, and wider Asian markets. 

Officials said the partnership could significantly reduce fertilizer costs, combining Indonesia’s high domestic demand with Jordan’s abundant mineral resources. 

Talks also included the development of advanced water-management systems based on Jordan’s irrigation technology, which Indonesia is considering adopting for modern farming clusters. 

Drone-based distribution of fertilizer, herbicides, and pesticides is also under review for nationwide implementation. 

King Abdullah II concluded his two-day state visit on Saturday, October 18, 2025, departing from Halim Perdanakusuma Air Base. President Prabowo personally accompanied him to the airfield, underscoring the close diplomatic relationship between the two nations. 

Source: Antara News