TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Popular Reads
Top Results
No results found. Please check your search term and try again
Can't find what you're looking for?
View all search results
Popular Reads
Top Results
No results found. Please check your search term and try again
Can't find what you're looking for?
View all search resultsProfound budget policy changes failed to lift growth in 2025
The first full year under the leadership of President Prabowo Subianto was marked by pronounced changes in budget allocations and a shift toward pro-growth fiscal policy, but amid external and internal challenges, this has yet to reflect in GDP figures.
Change text size
Gift Premium Articles
to Anyone
Share the best of The Jakarta Post with friends, family, or colleagues. As a subscriber, you can gift 3 to 5 articles each month that anyone can read—no subscription needed!
A view of South Jakarta's skyline on a typical weekday afternoon of March 3, 2023. (JP/Deni Ghifari)
I
ndonesia looks back at a year marked by intertwined internal and external developments that together created a turbulent economic environment the government struggled to navigate while maintaining both sustainable growth and fiscal stability.
Aside from lower prices of some key Indonesian export commodities, the external pressure originated from the United States, where President Donald Trump, soon after assuming office in January, upended global trade with a salvo of import tariffs aimed at reindustrializing America.
Push and pull tactics employed by the US government caused uncertainty over what might happen next, leaving businesspeople on tenterhooks and many investment decisions in limbo.
The dust eventually settled and the wheels began to turn again, but the protracted uncertainty hurt global trade flows and gross domestic product growth.
In Indonesia, trade activity slowed down as tariff uncertainty peaked in earlier in the year but eventually rebounded and exceeded expectations as exporters tried to get US-bound shipments out before the tariffs diminish access to the world’s largest consumer market.
The trade disruption, which began with the US president announcing the so-called ‘reciprocal’ tariffs in early April, could not have come at a worse time for Indonesia, since the government had just undertaken a mammoth fiscal shift weeks earlier, cutting many spending items to free up a large sum for President Prabowo Subianto’s flagship free meals program.
The fiscal overhaul froze more than 7 percent of the entire year’s budget, a large amount of the planned spending was paused, and some businesses lost cues for investment they had inferred from the original 2025 State Budget Law.
