Indonesia’s Economy Remains Resilient Amidst Global Turmoil

Jakarta – Indonesia’s economy is demonstrating strength and stability despite increasing global geopolitical tensions, particularly those stemming from the conflict involving the US, Israel, and Iran. Finance Minister Purbaya Yudhi Sadewa assured the public on Wednesday, March 11, 2026, that the nation is well-equipped to manage any negative impacts.

Economic Growth and Stability

“No necessitate to be afraid, friends, as we are able to control the negative impacts thanks to our strong position,” stated Minister Purbaya during the APBN KiTa press conference. The government is optimistic about achieving economic growth between 5.5% and 6% in the first quarter of 2026, exceeding the 5.39% growth recorded in the last quarter of 2025. This projected acceleration reflects strengthened economic activities across various sectors.

Key Economic Indicators

• Purchasing Managers’ Index (PMI): Indonesia’s manufacturing PMI reached a record high of 53.8 in February 2026, signaling robust expansion in the manufacturing sector.
• Trade Surplus: The country has maintained a trade surplus for 69 consecutive months, indicating strong export performance.
• Foreign Exchange Reserves: Indonesia’s foreign exchange reserves stand at a healthy US$152 billion, providing a substantial buffer against external shocks.
• Mandiri Spending Index: The index reached 360.7 in February 2026, demonstrating increased consumer spending, particularly in consumer goods, education, and community mobility.
• Retail Sales & Consumer Confidence: Retail sales continue to grow, and the consumer confidence index remains at a high level, indicating sustained household consumption.
• Automotive Sector: Car sales experienced a double-digit growth of 12.2% in February 2026, while motorcycle sales also showed positive growth of around 1%.

Impact of Global Oil Prices

Indonesia is preparing for potential oil price surges related to the escalating conflict in the Middle East. Minister Purbaya Yudhi Sadewa indicated that the government has developed scenarios to manage the fiscal impact, stating, “I’ve run the numbers—even if crude oil hits 92 dollars per barrel, we can still manage the budget.” Business Indonesia reported that domestic demand, accounting for approximately 90% of GDP, contributes to the nation’s economic resilience.

Indonesia’s Neutral Stance

Despite the ongoing conflict, Indonesia maintains a neutral position, adhering to its principle of an independent and active foreign policy. The Ministry of Foreign Affairs has urged all parties to cease violence and pursue de-escalation. Tempo.co reports that Indonesia aims to act as an “honest broker” rather than taking sides in the conflict.

Looking Ahead

Indonesia’s strong economic indicators and proactive government measures suggest the country is well-positioned to navigate the current global economic challenges. Continued monitoring of the geopolitical situation and flexible fiscal management will be crucial to sustaining economic stability and growth in the coming months.