Indonesia Has Strong Capital to Face Global Economic Weakening
By: Mila Mayang Sari
The global economy is currently overshadowed by high uncertainty due to trade wars, geopolitical pressures, and economic slowdowns in various developed countries. However, in the midst of this challenging situation, Indonesia has been able to demonstrate strong resilience and optimism. Several macroeconomic and financial market indicators show that Indonesia is not only able to survive, but also continues to grow consistently. This is proof that Indonesia has strong fundamental capital in facing external pressures and global turmoil that is difficult to predict.
Based on data from the Central Statistics Agency, Indonesia’s economic growth in the first quarter of 2025 reached 4.87% annually. This figure places Indonesia as the country with the second highest growth in the ASEAN-5 region, only below the Philippines. This achievement is higher than Singapore which grew 3.8%, Malaysia 4.4%, and Thailand which grew even lower. Despite experiencing a slight slowdown from the previous quarter, this performance confirms that Indonesia remains on a stable recovery path. In fact, in a global situation full of pressure, Indonesia has been able to maintain its positive economic performance.
Economist Syafruddin Karimi projects that Indonesia’s economic growth throughout 2025 will remain in the range of 4.95–5.05%. Strong domestic consumption is expected to be the main driver of growth, while exports remain a challenge due to weakening global demand. However, the momentum of shopping during Eid and the end of the year, as well as domestic consumption peaking in the third quarter, shows that the purchasing power of the Indonesian people is maintained. This is a strength in itself in supporting the national economy amidst slowing global trade.
Meanwhile, in terms of the financial market, Indonesia is again in the world spotlight. Since early April 2025, the Composite Stock Price Index (IHSG) has jumped by 10.64%. This performance places Indonesia as the stock market with the fastest recovery in the world, surpassing major stock indices such as the S&P 500 in the United States, DAX in Germany, and Nikkei in Japan. The sharp increase in the JCI reflects high investor confidence in Indonesia’s economic stability and growth prospects, especially amidst global sentiment that is still shrouded in uncertainty due to trade wars and geopolitical volatility.
Executive Director of the Kadin Institute, Mulya Amri, explained that the revival of the Indonesian stock market was driven by a number of strategic factors. First, investment realization in the first quarter of 2025 reached IDR465.2 trillion, up almost 16 percent compared to the same period the previous year. This investment also absorbed more than 594 thousand workers, with an even distribution, where more than half of it flowed outside Java. This shows that the government has succeeded in maintaining the momentum of equitable development and creating an inclusive investment climate.
Second, Indonesia received a rating increase from the global financial institution UBS, from “neutral” to “overweight”. This means that Indonesia is now considered a very worthy market to be a primary investment destination because it offers high returns with relatively low risk. UBS highlighted that the Indonesian stock market is currently undervalued but has strong fundamentals, making it an ideal choice in a defensive investment strategy amid global uncertainty.
Optimism about Indonesia’s economic strength is also supported by trust in government policies that prioritize domestic resilience. President-elect Prabowo Subianto has emphasized on various occasions the importance of building national independence as a response to global challenges. This strategy has received a positive response from the market because it has proven to be able to maintain macroeconomic stability while increasing investment attractiveness.
This condition further confirms that Indonesia has strong capital in facing the weakening global economy. The strength of domestic consumption, inclusive investment growth, capital market stability, and adaptive policy reforms are the main foundations of national economic resilience. Coupled with the strengthening of domestic financial institutions and the increasingly even distribution of development, Indonesia shows that the economy is not only growing, but also moving in a more sustainable and resilient direction.
