The Bank Indonesia Board of Governors Meeting on July 15–16, 2025, decided to cut the BI Rate by 25 basis points to 5.25%, along with adjustments to the Deposit Facility rate to 4.50% and the Lending Facility rate to 6.00%. BI Governor Perry Warjiyo stated that this move aims to maintain stability and boost economic growth through a mix of monetary, macroprudential, and payment system policies.
Bank Indonesia’s five key strategies include: stabilizing the rupiah exchange rate, enhancing pro-market monetary operations, increasing transparency in lending rates, expanding payment digitalization (including cross-border QRIS with Japan and China), and strengthening international cooperation and inter-agency synergy, such as with the Financial System Stability Committee (KSSK) and the government, to support national priority programs.
— Kontan, July 16, 2025
U.S. Import Tariff Lowered to 19%, DEN Projects 0.5% GDP Growth and 1.6% Investment Increase
The reciprocal tariff agreement between Indonesia and the United States, which reduces U.S. import duties on Indonesian products from 32% to 19%, is expected to significantly boost Indonesia’s economic growth. Chairman of the National Economic Council (DEN), Luhut Binsar Pandjaitan, stated that simulation results indicate a potential GDP increase of 0.5%, investment growth of 1.6%, and improvements in employment and welfare by 1.3% and 0.6%, respectively.
Luhut emphasized that the agreement opens up opportunities for exports, investment, and technology transfer without being a one-sided concession. Indonesia now holds the lowest additional tariff rate from the U.S. among trade-surplus countries, strengthening national competitiveness. DEN is encouraging inter-ministerial policy synergy to support deregulation, logistics efficiency, and inclusive growth acceleration.
— Kontan, July 17, 2025
Business Activity Rises in Q2 2025, Driven by Budget Realization and National Holidays
A Bank Indonesia survey recorded improved business performance in Q2 2025, with the Weighted Net Balance (SBT) reaching 11.80%, up from 7.63% in the previous quarter. The increase was driven by strong performance in the government sector, manufacturing, and accommodation and food services—mainly due to budget realization and religious holiday periods. Production capacity also rose to 73.58%.
BI projects the positive trend to continue into Q3 2025, with an expected SBT of 11.98%, supported by the launch of construction projects and stable demand in the mining sector. However, performance remains below the same period last year, indicating that the recovery is not yet fully optimal.
— Tempo, July 18, 2025
Bank Indonesia’s Q2 2025 Manufacturing PMI Slows, HIMKI Warns of Contraction Risk if Unaddressed
Bank Indonesia’s Manufacturing Purchasing Managers’ Index (PMI) stood at 50.89% in Q2 2025, indicating continued expansion but at a slower pace. Abdul Sobur, Chairman of the Indonesian Furniture and Handicraft Industry Association (HIMKI), attributed the slowdown to global uncertainty and supply chain disruptions, which have delayed raw material delivery and reduced workforce levels.
In the furniture and handicraft sector, export demand from markets such as the U.S. and Europe has declined, while production costs have risen due to longer lead times and higher input prices. As a result, companies are postponing expansion and hiring plans. Sobur warned that if this trend is not addressed, it could hinder real sector investment. He urged the government to boost domestic demand, ensure export certainty, and provide fiscal stimulus and interest rate relief to support labor-intensive industries.
— Kontan, July 18, 2025
Trade Minister Affirms Indonesia Won’t Engage in Transshipment, Maintains U.S. Tariff Commitment
Trade Minister Budi Santoso confirmed that Indonesia will not engage in transshipment practices—importing goods from third countries and re-exporting them with minimal processing—to avoid high U.S. import tariffs. This statement follows the recent tariff agreement between Indonesia and the U.S., which reduced tariffs on Indonesian products from 32% to 19%.
Budi stressed the importance of honoring the agreement to prevent tariff hikes, citing Vietnam as an example, which faced a 40% tariff due to transshipment practices. He affirmed Indonesia’s commitment to fair and rule-based trade to uphold trust and stability in its trade relationship with the United States.
— Kontan, July 17, 2025
Indonesia Officially Launches Ocean Centre to Promote Inclusive and Sustainable Blue Economy
The Ministry of National Development Planning (Bappenas), in collaboration with the UN Global Compact Network Indonesia (IGCN), has officially launched Ocean Centre Indonesia as part of a global initiative to advance a safe, inclusive, and sustainable blue economy. The Ocean Centre serves as a multi-stakeholder collaboration platform involving government, businesses, academia, and NGOs, aligned with the Indonesia Blue Economy Roadmap 2023–2045.
The initiative focuses on four key strategic sectors: shipping and ports, capture and aquaculture fisheries, offshore renewable energy, and finance and investment. Indonesia becomes the third country to launch such a center, following India and the Philippines.
— Kontan, July 16, 2025
Government to Introduce Export Duty on Coal and Gold Starting Next Year
Minister of Energy and Mineral Resources Bahlil Lahadalia confirmed that export duties on coal and gold will take effect next year, with technical regulations currently being finalized. The duties will be dynamic, applied only when commodity prices are high to avoid burdening businesses during market downturns.
Industry players such as PTBA and PTFI support the policy in principle but urge the government to consider market conditions and downstream progress. PTFI hopes its refined gold production can be fully absorbed by Antam to avoid the duty. Meanwhile, the Indonesian Mining Association (IMA) emphasized the need for a clear basis for the export duty to ensure it is not merely an additional fiscal burden.
— Kontan, July 18, 2025
Funding for Merah Putih Cooperatives Ready to Roll Out Following July 21 Launch
The government will officially launch the Merah Putih Village/Urban Cooperatives (Kopdes/Kel) nationwide on July 21, 2025, in Klaten, Central Java. The program will be supported by funding through the People’s Business Credit (KUR) scheme, offering up to IDR 3 billion in loans, with 6% interest and tenors of up to 10 years. Deputy Minister of Cooperatives Ferry Juliantono confirmed that regulations and funding are in place, with 103 pilot cooperatives ready to serve as operational models.
Currently, 96.45% of Kopdes have secured legal entity status, and the launch will be broadcast simultaneously across 38 provinces. The government aims for all Kopdes to be fully operational by October 28, 2025. The program is expected to strengthen village economies through cross-sector collaboration and strong support from SOEs and local governments.
— Kontan, July 15, 2025
Trump Announces New 19% Tariff for Indonesia, Opening Wider Access to U.S. Market
U.S. President Donald Trump has announced a reduction in import tariffs on Indonesian goods to 19%, down from the previous 32%, as part of a reciprocal tariff agreement. Head of the Presidential Communications Office (PCO), Hasan Nasbi, stated that Indonesia now enjoys the lowest tariff among Asian countries, including Vietnam, which faces a 20% rate. He credited this achievement to the Indonesian government’s intensive negotiation efforts. Further details of the agreement will soon be announced by President Prabowo.
The deal follows extended negotiations between Coordinating Minister for Economic Affairs Airlangga Hartarto and U.S. trade authorities in Washington on July 9, 2025, which delayed tariff implementation until the new agreement was finalized.
— Kontan, July 16, 2025
Government Drafts AI Roadmap and Presidential Regulation for Inclusive, Cross-Sector Governance
The Ministry of Communications and Digital Affairs is currently drafting a national roadmap and a Presidential Regulation (Perpres) to guide the inclusive and cross-sector development and governance of artificial intelligence (AI). Deputy Minister Nezar Patria stated that the regulation will serve as a cross-agency reference, reinforcing existing legal frameworks such as the Electronic Information and Transactions Law (ITE Law) and the Personal Data Protection Law (PDP Law).
The roadmap is being developed through a quad-helix collaboration involving government, industry, academia, and civil society, with support from JICA and Boston Consulting Group. It will provide key guidance for AI adoption in strategic sectors such as transportation, healthcare, and education, while balancing innovation with public protection.
— Kontan, July 18, 2025