ASEAN 6 continues to benefit from deep integration into global manufacturing value chains, supported by a sizeable domestic market, UBS said.

The outlook for Indonesia's credit rating has dimmed further as Fitch Ratings revised its view to “negative” from “stable”, adding to warnings over policy uncertainty following a similar downgrade from Moody’s.  

"The escalating crisis in the Middle East is significantly worsening the global economic and security environment," President Lee Jae Myung said.

Asia sources 60 percent of its oil from the Middle East, leaving the region vulnerable to the disruptions. Refiners in Indonesia and Japan are sourcing more oil from the US to replace the shortfall. India will consider buying more from Russia, sources at two companies have said.

China set its economic growth target for 2026 at 4.5%-5%, a slight downgrade from the 5% pace achieved last year, which leaves room for greater, albeit not decisive, efforts to curb industrial overcapacity and rebalance the economy.

Purbaya said expenditure on Indonesia's free meals program could be scaled back, saving the country about Rp 100 trillion ($6 billion).

The United States-Israeli attack on Iran has sent global oil prices surging past US$80 per barrel, putting additional strain on the state budget, which could force painful adjustments.

Unlike in 2025, saving conditions entering Ramadan this year are weaker across income segments, limiting the spending before the disbursement of holiday bonuses.

Indonesia has recorded a slight increase in its inbound tourism, welcoming 1.01 million foreign visitors in January, Statistics Indonesia (BPS) data show.  

To mitigate further impacts, Indonesia is seeking alternative oil import sources outside the Middle East, including from the US.

Shipments of crude palm oil (CPO) surged 59.6 percent in January, while coal and steel exports declined by 16.04 percent and 0.13 percent, respectively.

Bank Permata chief economist Josua Pardede projected that headline inflation would remain above 3 percent in the first quarter of 2026 before moderating below 3 percent toward the end of the year.

The country’s headline Purchasing Managers’ Index (PMI) rose to 53.8 in February from 52.6 in January, marking the highest reading since March 2024. The index remained above the 50-point threshold, which separates expansion from contraction.

Maersk stated that the firm will continue to prioritize the Trans-Suez route once the situation stabilizes and security conditions permit again.

The OJK as well as industry observers have welcomed the Finance Minister's move to extend the liquidity injection policy for another six months in a bid to generate higher loan growth, while suggesting that a subsequent extension could be on the books when the current period ends in March.

Local think tanks are weighing in on the limited policy space and domestic benefits of the new US-Indonesia trade deal, even as businesses and policymakers wait to decide next moves amid the limbo left by the US Supreme Court's ruling.

Multiple vessels in the area have received VHF transmission from Iran's Revolutionary Guards that "no ship is allowed to pass the Strait of Hormuz".

The administration argued Friday for a delay of up to four months, before litigation on refunds is brought up again before the US Court of International Trade.

An analysis by Mandiri Institute showed that 72.3 million people experienced a talent mismatch last year, meaning their education levels did not align with their job requirements.

S&P Global Ratings warned that escalating debt-servicing costs are increasing the risks to Indonesia’s sovereign credit profile and could trigger a negative rating action if sustained.

Rising demand from hydropower plants, floating solar plants and data centers is intensifying supply pressure, highlighting the need for accelerated investment in dams, reservoirs and distribution networks.

Why disasters require timely recovery spending, and what the Sumatra disaster reveals about the limitations of budget orthodoxy

German Chancellor Friedrich Merz touched down in China on Wednesday, beginning his inaugural visit to his country's largest trade partner and a high-tech rival as Europe's biggest economy struggles.

Indonesia targets sugar self sufficiency for household consumption for 2028, followed by industrial refined sugar by 2030, while industrial salt sufficiency is set for 2027.

Indonesian exporters are worried that new United States import tariffs will reduce demand for their products in the world’s largest consumer market, starting Tuesday.

Indonesia should respect US domestic policy development, while mitigating profound structural risks from the tariff deal by planning a strategic approach over the coming months.

The national chip design development tracks will focus on automotive technology, Internet of Things, data centers and home appliances, among others.