The reciprocal tariff policy imposed by the United States poses a real risk to employment in Indonesia, especially in export-oriented labor-intensive sectors such as textiles and footwear. These two sectors not only contribute a significant portion of manufacturing exports, but also absorb a large number of workers, especially young, low-educated, and casual workers, who are...Read more

Indonesia experienced deflation of 0,09% (yoy) in February 2025, below Bank Indonesia's target range of 1,5%-3,5%, mainly due to electricity tariff adjustments. Core inflation remained stable, indicating that the decline was not driven by weakening demand. Inflationary pressures are expected to increase in the coming months as demand increases during the fasting month and subsidies end...Read more

Summary ● The macroeconomic assumption of 5,2%1 in the preparation of the 2025 State Budget shows a less aggressive but realistic government target considering the current weakening economic conditions. ● The government through Presidential Instruction2 has implemented a budget efficiency policy of Rp306,69 trillion, consisting of Rp256,1 trillion from the ministry/institution budget and Rp50,59 trillion from Transfers to Regions. ● The efficiency policy will affect...Read more

Year-on-year (YoY) inflation in February 2025 was reported at -0,09% or lower compared to annual inflation in February 2024 which reached 2,75%. Furthermore, this month's inflation rate was also lower than the previous month, January 2025 which was 0,76%. The decrease in YoY inflation in February 2025 compared to January 2025 was driven by a decrease in prices in...Read more

Two issues that are currently emerging and related to the current labor discourse are the #KaburAjaDulu phenomenon and Presidential Instruction (Inpres) Number 1 of 2025 concerning budget efficiency. #KaburAjaDulu, which reflects the trend of labor migration abroad, is getting stronger amidst domestic economic and political uncertainty. Meanwhile, the budget efficiency policy in Inpres 1/2025...Read more

Headline inflation in January 2025 was recorded at 0,76% (yoy), its lowest level since 2000 and below BI's target range. This was largely influenced by electricity tariff discounts of up to 50% for certain household groups. Last month, the Fed, in line with market expectations, kept its benchmark interest rate on hold and Bank Indonesia inadvertently...Read more

The opening of the year in January 2025 was greeted by an inflation rate of 0,76%. This figure is lower than January 2024 at 2,57%. The inflation that occurred in January 2025 on a year-on-year (YoY) basis was driven by price increases in several expenditure groups such as price increases in the personal care group and other types with a rate of 7,27%, food group,...Read more