Highlight

• Q2 2024 GDP Growth: Indonesia's economy showed resilience with a 5.05% year-on-year growth in Q2 2024, slightly down from Q1 but in line with expectations. This growth reflects the country's ability to navigate global economic uncertainties, supported by strong domestic consumption and investment.
• Inflation and Manufacturing Sector Challenges: Inflation in Indonesia fell to 2.13% in July, the lowest since February 2022, primarily due to moderating food prices. However, the S&P Global Indonesia Manufacturing PMI dropped to 49.3, signaling contraction in the manufacturing sector, which poses challenges to sustaining the government's economic growth targets.
• Robust Investment Realization: Total investments in Q2 2024 reached IDR 428.4 trillion, with balanced contributions from domestic and foreign investors. Key sectors such as basic metals and mining attracted significant investment, reflecting confidence in Indonesia's long-term economic potential despite global headwinds.
• 2025 State Budget and Fiscal Outlook: The 2025 State Budget sets a growth target of 5.2% and plans to maintain inflation at 2.5%, with a fiscal deficit projected at 2.52% of GDP. The budget underscores the government’s focus on enhancing purchasing power and social welfare, while allowing room for strategic adjustments by the incoming administration.
• Foreign Exchange Reserves and Monetary Policy: Indonesia's foreign exchange reserves increased to USD 145.4 billion in July 2024, the highest level since December 2023, providing a strong buffer against external shocks. Bank Indonesia maintained its benchmark rate at 6.25%, reflecting a cautious approach amid global uncertainties and supporting the stability of the Indonesian Rupiah.