Research & Stock Picks

Economic Reports

03 February 2025

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Samuel Monthly Economic Insights 3 February 2025

Highlights

- Economic & Financial Outlook: Indonesia’s economy remains resilient, with 2025 GDP target of 5.2%. However, risks persist due to global economic conditions, capital outflows, and The Fed’s policy. Bank Indonesia’s surprise rate cut to 5.75% aims to stimulate growth but adds pressure on the rupiah.

- Business & Investment Trends: The stock market is poised for recovery, driven by IPOs in energy and real estate. FDI surged, with Japan committing USD 815 million, while Indonesia’s carbon exchange gained momentum. However, regulatory challenges continue to affect the downstream industry push.

- Fiscal & Monetary Policy Challenges: Budget reallocations prioritized social welfare, but ambitious programs may push the deficit beyond 3%. Tax reforms included new levies on sugar and vehicles, while a postponed VAT hike raised revenue concerns.

- Geopolitical & Security Developments: Prabowo has been active in international diplomacy, strengthening ties with the US, BRICS, and ASEAN. Military influence in governance has grown, raising concerns about democratic stability. Indonesia expanded defense ties with Japan, India, and China.

- Climate & Digital Economy Initiatives: Renewable energy investments surged with backing from UAE and Japan, while Indonesia is considering cutting nickel production to stabilize global prices. The government accelerated AI governance and fintech regulations, tightening oversight on P2P lending.

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