Highlights

• Risk-on start to 2026- equities opened strong, foreigners returned: JCI rallied to fresh highs early in the week, supported by renewed foreign inflows and early-year positioning, before mild profit-taking emerged into Friday—signalling rotation rather than reversal.

 

• External buffer strengthened meaningfully-FX reserves surprised to the upside: FX reserves surged to USD 156.5bn (Dec-25)—above SSI’s USD 152bn forecast—reinforcing external resilience and BI’s confidence in rupiah stability amid heightened global risk events.

 

• Trade surplus stayed intact, but export slowdown is now a real growth sensitivity: Indonesia extended its long surplus streak, yet exports fell 6.6% YoY (Nov-25) with commodity normalization and weaker demand from China/Japan—confirming that 2026 growth will lean more heavily on domestic demand and investment execution.

 

• Fiscal deficit ended at 2.92% of GDP: expected, but the quality issue is structural: FY25 deficit remains within SSI’s long-flagged 2.85–9% scenario, but the bigger signal is structural revenue weakness (commodity fade + restitutions + dividend transition to Danantara), while spending execution became increasingly back-loaded, raising multiplier-efficiency concerns.

 

• 2026 outlook-policy support remains strong, but margin for error is narrowing: Fiscal space remains available (<3% deficit, manageable debt, easing financing), supporting the government’s 5.4% growth target—yet without revenue reform and spending-quality upgrades, capex risks becoming the adjustment variable if revenue weakness persists.