Triggered By US Tariffs, BI Says Global Economy Is Still Slowing Down

Bank Indonesia (Photo: Antara)

JAKARTA - Bank Indonesia (BI) said the world economy is still in a slowing trend due to the impact of the United States (US) tariff which has pushed uncertainty to remain high.

BI Governor Perry Warjiyo said the US had again imposed additional tariffs on the pharmaceutical, furniture and automotive sectors since October 1, 2025, and announced plans to impose an additional 100 percent tariff on products from China.

According to him, various indicators show that US tariff policies are weakening global trade performance, as reflected in the slowdown in exports and imports in most countries.

"In the US, economic growth is still weak, thus encouraging the continued decline in employment conditions, Japan, Europe, and India's economy has not been strongly influenced by household consumption, amid the fiscal-moneter stimulus that has been carried out." Perry said at a press conference, Wednesday, October 22.

Meanwhile, he said that China's economy in the third quarter of 2025 was increasing, driven by fiscal stimulus.

According to him, this development has an impact on the world economic growth in 2025 which is predicted to be 3.1 percent, slightly above the previous forecast of 3.0 percent.

He added that the probability of a reduction in the Fed Funds Rate (FFR) is getting bigger in line with the weak employment conditions in the US.

In line with that, Perry said that the short-term US Treasury yield had declined again and the US dollar (DXY) currency index tended to weaken.

"The flow of capital to emerging markets (EM) is still fluctuating along with the high uncertainty of global financial markets," he explained.

According to him, this development demands vigilance and strengthening the policy response to mitigate the impact of the uncertainty of the economy and the global financial market which is still high in the domestic economy.