DEN: Indonesian Economy is Still Far from Crisis

Jakarta - Member of the National Economic Council (DEN) Mochammad Firman Hidayat said that the current Indonesian economic condition is still solid even though it is in the midst of global geopolitical turmoil.

Therefore, DEN assesses that Indonesia's economy is still far from a crisis condition. Firman Hidayat said this was supported by Indonesia's macroeconomic fundamental indicators which are still very solid.

This view, he continued, was conveyed by DEN in a meeting with President Prabowo Subianto at the Presidential Palace Complex, Tuesday, June 9. Furthermore, Firman detailed a number of indicators that reflect the strength of the domestic economic fundamentals.

He said that Indonesia still recorded high economic growth, reaching 5.61 percent on an annual basis in the first quarter of 2026. In addition, Firman also highlighted Indonesia's relatively stable inflation, which was 3.08 percent on an annual basis in May 2026.

However, in addition to basic macroeconomic indicators, he also underlined the condition of Indonesia's corporate balance sheet which is still healthy as a reflection that Indonesia is not entering a crisis phase. This, continued Firman, is reflected in corporate debt in US dollar terms which is much lower than during the 1998 crisis.

Data on Indonesian External Debt Statistics (SULNI) released by Bank Indonesia (BI) also confirmed a decline in corporate foreign debt. In the first quarter of 2026, the position of private foreign debt was recorded at USD 191.4 billion or down 1.8 percent compared to the same period last year.

Firman said this condition shows that companies in Indonesia are quite good in mitigating external risks, especially those originating from exchange rate fluctuations.

However, Firman emphasized that Indonesia still needs to be aware of global uncertainties given that geopolitical turmoil lasts longer than the DEN estimates.

According to him, one of the most crucial and anticipated impacts of global turmoil is the rise in world energy prices, which has the potential to increase production and distribution costs.