Today's headlines

Bank Indonesia Raises Its Key Interest Rate by 50 bps to 5.25% in May 2026

Bank Indonesia decided to raise its benchmark interest rate (BI Rate) from 4.75 percent to 5.25 percent in an effort to support the fragile rupiah rate that had hit a record low against the US dollar one day earlier (trading at around IDR 17,700 per US dollar). This is an aggressive move but one that does indeed support the Indonesian currency.

Indonesia Investments Released April 2026 Report - Plastic & Energy Challenge

On Monday (04 May 2026), Indonesia Investments released the April 2026 edition of its monthly report. In this report we discuss key economic, political and social developments that occurred in Indonesia in April 2026.

Indonesia's Economic Growth at 5.61% in Q1-2026 But Concern Over Fiscal Economy Persists

Indonesia's Statistical Office (Badan Pusat Statistik, BPS) announced on Tuesday (5 May 2026) that the country's gross domestic product (GDP) had reached a growth rate of 5.61 percent year-on-year (y/y) in the first quarter of 2026 (Q1-2026).

Energy in Indonesia: Price Gap Challenge for Converting Coal into Dimethyl Ether

Indonesia imports the vast majority of the liquified petroleum gas (LPG) it consumes. This obviously drains the foreign exchange reserves. But considering Indonesia has massive coal reserves, the gasification of coal can be an interesting alternative. By converting low-quality domestic coal into Dimethyl Ether (DME), the country can reduce purchases of expensive LPG from overseas.

Indonesia's Classic Oil Lifting Problem - Aging Oil Fields and Lack of Investment

Since the mid-1990s, Indonesia's crude oil production has been experiencing a significant decline, forcing the country to leave the OPEC. Problematically, regulatory and legal uncertainty have been undermining the attractiveness of the investment environment, meaning that Indonesia has become - to a significant extent - dependent on the aging oil fields that are unable to meet all domestic oil demand.

International Institutions Cut Projections for Indonesia's 2026 Economic Growth

The Iran War has heavily affected the fiscal and financial economy of Indonesia. Sharply rising crude oil prices cause a widening budget deficit for the government, while the rupiah (and to a lesser extent Indonesian stocks and bonds) weakened significantly as financial market participants have become wary.

Diagnosing JKN: Addressing the Unhealthy Financial Pulse of Indonesia’s Healthcare System

After three years of surplus (2020-2022), a structural deficit has returned for Indonesia's National Health Insurance program (Jaminan Kesehatan Nasional, JKN) that is managed by the Social Security Agency for Health (BPJS Kesehatan). Moreover, this deficit seems to be widening amid inflation and rising demand for medical treatment.

Indonesia Faces a Plastic Packaging Crisis (And It's Not the Waste Problem)

While the Iran War (specifically the closure of the Strait of Hormuz) is seriously undermining the fiscal health of Indonesia through high global oil prices, there are also other problems being 'imported' into Indonesia as a consequence of this war. For example, the scarcity of raw materials is making plastic packaging expensive and difficult to find.

Government Strategies to Prevent a Fuel Crisis in Indonesia

While the Philippines declared an energy crisis two weeks ago, it seems that matters in Indonesia remain under control. So far, there haven't been long queues at gas stations (to hoard fuels), while government officials repeatedly ensure that there is enough fuel available for society, although people are encouraged to cut back on fuel consumption (for example, by working-from-home once a week).

Indonesia Seeking Energy Resilience Through the Bioenergy Program

The Iran War reveals the risks involved when countries are dependent on imports of energy to meet domestic demand. In the case of Indonesia, which subsidizes part of domestic energy consumption, skyrocketing crude oil prices threaten to push the government's budget deficit beyond the legal cap of 3 percent of gross domestic product (GDP). And so, it is time for action.