Research & Stock Picks

Economic Reports

03 February 2026

By

Samuel Daily Economic Insights 3 February 2026

Overview

Indonesia entered February 2026 with a mixed macro picture marked by resilient domestic activity, rising inflation pressures, and heightened geopolitical uncertainty. Manufacturing momentum remains solid, supported by seasonal demand and improving orders, even as supply bottlenecks re-emerge. External balances are still healthy, with a large 2025 trade surplus providing a buffer against global volatility and currency weakness. At the same time, inflation has edged above Bank Indonesia’s target ceiling, driven more by administered prices and FX effects than by overheating demand. Capital market participation continues to deepen structurally, despite recent market turbulence and concerns over governance and transparency. Fiscal and tax administration reforms are showing progress, reflected in rising tax compliance and digital system adoption. However, illegal economic activities, particularly in mining, highlight significant leakages and governance challenges. Politically, President Prabowo is positioning Indonesia firmly within a non-aligned and assertive foreign policy stance amid global conflict risks. Overall, the backdrop suggests resilience with rising policy trade-offs between stability, growth, and enforcement.

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