Indonesia’s trade balance surplus through the end of 2025 is projected to come under pressure due to a 32% tariff imposed by the United States, despite ongoing bilateral negotiations. Myrdal Gunarto, an economist at Maybank Indonesia, predicts that the trade surplus trend could decline by around 30%, equivalent to US$2.8–3.2 billion, mainly due to a drop in export contributions to the U.S. market.
Myrdal warned that the tariff would have the greatest impact on Indonesia’s key export commodities that are heavily reliant on the U.S. market, with potential volume declines of up to 30%. He also highlighted fiscal implications, although expected to be limited, particularly in terms of tax revenue from the export sector.
On the other hand, Myrdal emphasized the need for efficiency in the planned energy import cooperation with the U.S., such as oil and LPG, which remains under negotiation until the end of July 2025. He stressed that domestic economic interests must remain the top priority and that cooperation should focus on sustainable investment.
– Kontan, July 9, 2025
Government and Parliament Agree on Export Duty and Excise Expansion to Strengthen 2026 Fiscal Framework
The Indonesian government and the House of Representatives (DPR) have agreed to expand the base for export duties and excise taxes in 2026 as part of efforts to safeguard fiscal health and enhance national economic competitiveness.
Key points agreed upon during the working meeting between Commission XI of the DPR and the government include:
- Expansion of export duties to cover gold products (raw/concentrate/dore bullion), along with plans to reintroduce export duties on coal, which was previously only subject to royalties.
- Parliament urged the government to extend excise coverage to new goods, including the long-delayed excise on sugar-sweetened packaged beverages (MBDK).
- Intensification of tobacco excise (CHT) was also encouraged, guided by four pillars: consumption control, state revenue, labor protection, and combating illicit cigarettes.
- Increased import tariffs on certain commodities to boost state revenue.
– Bisnis, July 7, 2025
Global Trade Grows by US$300 Billion in H1 2025 Despite Tariff Uncertainty
UNCTAD reported that global trade value in the first half of 2025 increased by approximately US$300 billion, driven by growth in the goods sector (US$230 billion) and services (US$70 billion). In Q1 2025, global trade rose 1.5% quarter-on-quarter and 3.5% year-on-year, while the services sector posted a strong annual growth of 9%, signaling a post-pandemic recovery in mobility.
The main driver of the trade value increase was the rise in global goods prices, even though trade volume grew by only around 1%. This reflects the impact of geopolitical tensions, energy price fluctuations, and ongoing supply chain adjustments.
– Bisnis, July 12, 2025
Government Promotes Batam as a Strategic Hub for National AI Industry
The Ministry of Communications and Digital (Komdigi) continues to strengthen Indonesia’s competitiveness in the Artificial Intelligence (AI) sector by establishing strategic hubs in industrial zones, with Batam—known as a center for manufacturing and technology—identified as a key location.
Deputy Minister Nezar Patria emphasized Batam’s role as the flagship of Indonesia’s digital industry and a vital part of the national strategy to build a globally competitive AI ecosystem. Speaking at a focus group discussion with industry players and academics, he noted that Indonesia accounts for 40% of ASEAN’s digital economy potential, which is projected to reach USD 120 billion by 2027.
The government is currently preparing the AI Talent Factory, a collaborative initiative involving government, universities, industry, and research institutions aimed at developing a sustainable AI computing cluster and enhancing national human capital in artificial intelligence.
– Kontan, July 12, 2025
REI Acknowledges Slowing Growth in Property Sector
Real Estate Indonesia (REI) has acknowledged the current slowdown in the property sector, viewing it as part of a broader trend affecting multiple sectors amid global pressures and a domestic economic slowdown. Bambang Ekajaya, Vice Chairman of REI’s Central Board, also highlighted external factors such as the U.S. trade war and the potential for increased import tariffs on Indonesian products, particularly in light of Indonesia’s BRICS membership.
Nevertheless, REI remains optimistic, especially regarding the housing segment—both landed and vertical housing. Market potential remains substantial, as reflected in the housing backlog of 15 million units, particularly in the subsidized housing segment.
– Kontan, July 11, 2025
Wave of Bank IPOs: Set to Go Public to Strengthen Capital and Governance
Several national and regional banks are preparing for initial public offerings (IPOs) on the Indonesia Stock Exchange (IDX) as a strategic move to raise fresh capital. The funds will be used to strengthen capital structure, support business expansion, boost lending, and accelerate digital transformation. This initiative aligns with the Financial Services Authority’s (OJK) push for Regional Development Banks (BPDs) to enhance transparency and competitiveness through IPOs.
Summary of upcoming bank IPO plans:
- Bank Jakarta (formerly Bank DKI) aims to raise Rp3 trillion in early 2026 to upgrade from KBMI 2 to KBMI 3 category.
- Bank BJB Syariah targets an IPO between 2027–2028, aiming to raise Rp1.2 trillion to support expansion and digital initiatives.
- Bank Muamalat already holds public company status but is still awaiting official listing on the IDX.
- Superbank (a digital bank backed by Grab and EMTK) is considering an IPO with a fundraising target of US$200–300 million.
- Bank Sumut has postponed its IPO, opting instead to strengthen capital through private placements and bond issuance.
– Bisnis, July 9, 2025
Banking Profitability and Liquidity Weaken, Credit Risk on the Rise
As of May 2025, Indonesia’s banking sector continues to face profitability pressures, with Net Interest Margin (NIM) stagnant at 4.45%, down from 4.62% in December 2024. Return on Assets (ROA) also declined to 2.51%, compared to 2.69% at the end of last year.
Credit risk has risen, as indicated by the gross Non-Performing Loan (NPL) ratio climbing to 2.29%, and the net NPL increasing to 0.85%. Meanwhile, Loan at Risk (LaR) remains elevated at 9.93%, signaling persistent pressure on asset quality.
Banking liquidity has also weakened, despite total liquid assets reaching Rp2,266 trillion. Key liquidity indicators have deteriorated: the Liquid Assets to Third Party Funds (AL/DPK) ratio declined to 24.98%, AL/NCD fell to 110.33%, and most notably, the Liquidity Coverage Ratio (LCR) dropped to 192.41% from 200.35% the previous month—well below its December 2023 level of over 220%. The Net Stable Funding Ratio (NSFR) also decreased to 128.75% in Q1 2025.
These findings indicate potential pressure on banking system stability, particularly if credit risk and liquidity weakness persist without corrective measures.
– Bisnis, July 8, 2025