Indonesia Economic Fundamentals Remain Solid Despite Protests

Indonesia's economic fundamentals remain solid despite recent widespread political protests that caused temporary stock market declines and currency volatility. Coordinating Minister for Economic Affairs Airlangga Hartarto highlighted positive economic growth of 5.12 percent in the second quarter of 2025 and noted that the manufacturing PMI has expanded, with the Jakarta Composite Index reaching historic highs. The government, led by President Prabowo Subianto, emphasizes comprehensive collaboration between the government, businesses, and the public under the concept of Indonesia Incorporated, encouraging companies to retain and create jobs. Authorities are implementing a planned incentive package to support economic recovery and have vowed to defend the rupiah to ensure its stability amid the unrest. Although protests have resulted in fatalities and property damage, officials stress that these impacts are temporary and expect market confidence to recover as social and security issues are addressed. Experts caution that while Indonesia's economic conditions are stable, restoring investor confidence is crucial to preventing short-term instability.