Increasing uncertainty
Indonesia has recently felt increasing uncertainty in the economy, especially related to government finance. The main reason for this is that the government continues to create new programs, for example, the Free Nutritious Meals program (known as "MBG") and the Red and White Village Cooperative. People continue to say that the government needs to watch its spending in the future. If the country slips, falling into a deficit of more than 3% of GDP, then it will have to release a Government Regulation in Lieu of Law. If that happens, then the country's credit rating may also be affected, and the government will face increasing economic pressure since debt interest costs will rise.
In the midst of this uncertainty, the Central Bank of Indonesia released its balance of payments figures for Q4 2025, which showed a surplus of $6,072 million. Even though the Q4 current account was in deficit, the overall balance was in surplus because of the surplus in the capital account of $173 million, and in the financial account of $8,164 million.
The Central Board of Statistics released Indonesia's trade balance report for January 2026. The trade balance presented another surplus, although lower than the previous month. The surplus in January 2026 was $954.3 million compared to the $2,512.7 million achieved in December 2025.
The Central Board of Statistics also reported that the Consumer Price Index for the month of February 2026 resulted in inflation of 0.68% M/M and 4.76% Y/Y. During the policy meeting of February 18-19, 2026, Bank Indonesia decided to maintain the BI-Rate at 4.75%.
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