OECD Outlook: Global Growth at 3.9% in 2025, Indonesia at 4.9%

The global economy has shown more resilience than expected in the first half of 2025, but risks persist due to rising trade barriers and ongoing geopolitical and policy uncertainties, according to the OECD Interim Economic Outlook. 

Global growth is projected to slow slightly, from 3.3% in 2024 to 3.2% in 2025, before easing further to 2.9% in 2026. The moderation reflects stockpiles built ahead of tariffs being drawn down and continued pressures on investment and trade. 

“The global economy has remained resilient, but the full effects of higher tariffs and policy uncertainty are yet to be felt. Significant risks remain, including fiscal and financial stability concerns,” said OECD Secretary-General Mathias Cormann. He called on governments to resolve trade tensions and ensure fair, rules-based global trade. 

The OECD also urged central banks to stay vigilant, adjusting policy as needed, and recommended fiscal discipline to manage rising debt and budgetary pressures. Medium-term adjustment plans, spending reallocation, and revenue optimization are key to stabilizing debt levels. 

“Structural reforms will be crucial to improving living standards and realizing gains from technologies such as artificial intelligence,” added OECD Chief Economist Álvaro Santos Pereira. 

Inflation is moderating across most G20 economies as growth slows and labor pressures ease. Headline inflation is expected to fall from 3.4% in 2025 to 2.9% in 2026, while core inflation in advanced G20 economies remains stable at 2.6% in 2025 and 2.5% in 2026. For Indonesia, inflation is projected at 1.9% in 2025, rising to 2.7% in 2026, influenced by past currency depreciation. 

Country forecasts: 

• United States: GDP growth expected to fall to 1.8% in 2025 and 1.5% in 2026, affected by tariffs, slower net immigration, and federal workforce cuts. 

• China: Growth projected at 4.9% in 2025 and 4.4% in 2026, as front-loading unwinds, tariffs take effect, and fiscal support fades. 

• Indonesia: Growth forecast at 4.9% in 2025 and remains at 4.9% in 2026, with previous investment rebounds giving short-term boosts. The Indonesian government aims for a 5.4% growth this year. The economy expanded by 5.12% in the second quarter. 

 
Source: Jakarta Globe 
 

SOEs Ministry to Be Downgraded to Agency Under New Bill

The government plans to downgrade the State-Owned Enterprises (SOEs) Ministry into an agency, a senior lawmaker has said, as most of the ministry’s operational responsibilities have been transferred to Danantara, the state asset fund now in charge of nearly 900 state-run firms. 
 

Deputy House Speaker Sufmi Dasco Ahmad said the ministry would not be merged into Danantara but would be renamed the SOEs Agency, with both the House and the government aiming to finalize the change next week before the House’s recess period. 
 
A day earlier, State Secretary Prasetyo Hadi also said that “there is a possibility” of reducing the SOEs Ministry’s status to that of an agency. However, the final decision will depend on deliberations in the House, including matters related to the status of current ministry employees. 

 
“So, whatever the option, the best approach from a management perspective is to optimize and streamline our SOEs, even if there are consequences or implications for those currently serving in the SOEs Ministry. That’s part of what we’ll be considering later,” Prasetyo said.  

The proposal to downgrade the SOEs Ministry is part of a broader set of revisions to the SOEs Law, which is included in the 2025 Priority Legislative Program (Prolegnas). 

The SOEs Law was amended earlier in February to provide the legal foundation for the establishment of Danantara. 

Under Law No. 1/2025 on SOEs, Danantara enjoys sweeping powers as both a sovereign wealth fund and a holding company, managing dividends from all state-owned firms, approving capital injections funded by those dividends, overseeing corporate restructuring such as mergers or spin-offs, forming new holdings and submitting investment and operational plans to the House. 

The new revisions would formalize the ministry’s reduced role, as many of its functions have already been absorbed by Danantara, Dasco said. The ministry now primarily acts as a regulator, holding Series A shares on behalf of the state and approving draft government regulations. 

The bill would accommodate a range of inputs, including a Constitutional Court (MK) ruling that prohibits government officials from holding concurrent posts as SOE commissioners, as well as feedback from the public, academics and experts. 

“For example, there has been debate over whether SOE executives should be considered state officials,” stated Dasco, who is a member of President Prabowo Subianto’s Gerindra party. 

Last week, the House’s Legislation Body (Baleg) proposed including the Danantara bill and the Patriot Bonds bill in the 2026 Prolegnas, paving the way for a stand-alone legal foundation for the state fund. 

While Danantara is already referenced in existing legislation, a dedicated law is considered necessary to give it “stronger and more independent authority,” Baleg chairman Bob Hasan told a House meeting at the time. 

On September 19, President Prabowo appointed Deputy SOEs Minister Dony Oskaria as interim SOEs minister after Erick Thohir was appointed youth and sports minister in the latest cabinet reshuffle two days earlier.  

State Secretary Prasetyo said the President expected Dony to adapt quickly to the role, citing his current posts as deputy SOEs minister and Danantara chief operating officer.  

“The hope is that with this assignment, the ongoing restructuring of our SOEs can proceed more quickly,” he said regarding Dony’s appointment. 

Source: Jakarta Post 

EU to Delay Anti-Deforestation Law By Another Year

The European Union will delay launching its anti-deforestation law for a second time, Environment Commissioner Jessika Roswall said on Tuesday, postponing the ban on imports of commodities such as palm oil linked to forest destruction for another year. 

Brussels had already delayed the law by a year, but that had not quelled opposition from industry and trade partners such as Brazil, Indonesia and the United States, who say complying with the rules would be costly and hurt their exports to Europe. 

Roswall told reporters the postponement was necessary to address concerns about the readiness of information-technology systems needed to support the law. The delay was not linked to U.S. concerns about the policy, she said. 

"We have concern regarding the IT system, given the amount of information that we put into the system...That will...also give us time to look at the different risks," she said. 

COMMODITIES LINKED TO FOREST DESTRUCTION 

The EU deforestation law was due to take effect on December 30, and would have required operators selling goods including soy, beef and palm oil into EU markets to provide proof their products did not cause deforestation. 

The world-first policy aims to end the 10% of global deforestation fueled by EU consumption of imported goods but is a politically contested part of Europe's green agenda. 

As part of its trade deal with President Donald Trump, the EU committed to work to address U.S. producers' concerns over the regulation. The U.S. paper and pulp industry has previously demanded American products be exempted from the rules. 

EU countries, including Poland and Austria, have said European producers cannot comply with its traceability rules. 

In a letter to the chair of the European Parliament's environment committee, seen by Reuters, Roswall said the Commission feared the IT system risked "slowing down to unacceptable levels" which could disrupt trade. 

Environmental campaigners criticised the EU decision. 

"Every day this law is delayed equates to more forests razed, more wildfires and more extreme weather," said Nicole Polsterer, a campaigner at environmental group Fern. 

The European Parliament and EU member states must approve the delay. 

Source: Reuters