Research & Stock Picks

Economic Reports

24 March 2025

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Samuel Daily Economic Insights 25 March 2025

Overview

Indonesia’s economic landscape is marked by a mix of cautious optimism and deepening investor anxiety. While Moody’s has maintained the country’s credit rating at Baa2 with a stable outlook, fiscal concerns loom large, particularly around revenue shortfalls and rising political expenditures such as the Rp 171 trillion free meal program. The government is turning to foreign loans to fund development projects under the World Bank’s partnership framework, even as capital markets falter. Investor unease has intensified with the rollout of the Danantara sovereign wealth fund, despite its high-profile advisory board, amid concerns over transparency and governance. Foreign capital outflows have reached Rp 28.1 trillion, making Indonesian stocks among ASEAN’s worst performers. Meanwhile, systemic risks are surfacing in the construction sector, banks remain resilient, and lifestyle companies like Fore Coffee continue to pursue growth. On the policy front, the government is mandating full repatriation of export earnings and raising mining royalties to shore up foreign reserves, while trade tensions and investment competition with China and Australia sharpen. As political consolidation deepens, with growing concerns over democratic regression, the economy faces the challenge of balancing fiscal prudence, market confidence, and political ambitions.

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Daily Economic Report_25032025_EN

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