Jakarta, June 4, 2026 — Amid persistently high global uncertainty, Statistics Indonesia (BPS) recorded Indonesia’s export performance as fairly encouraging. Although inflationary pressure has also tended to increase and the rupiah exchange rate has weakened, Prasasti sees an opportunity for exports to continue growing, while also recognizing challenges that require swift and precise handling.
The Economic Indicators release issued by BPS recorded exports throughout January–April 2026 at US$92.15 billion, growing 5.48% year-on-year, with a sharp increase in April of up to 21.98%. Much of this surge was supported by exports of manufacturing products, which rose 29.07%, as well as downstream products such as processed nickel to China, which rose 73.6%, and CPO, which increased 20.4%. However, during the same period, inflation in May 2026 climbed again to 3.08% year-on-year, up from 2.42% in April, exceeding the 3% level. Prasasti Center for Policy Studies views this picture of Indonesia’s economy as a fairly positive development on the production and export side, but one that still leaves several areas of vulnerability requiring vigilance.
Prasasti Board of Experts member Halim Alamsyah, who previously served as Deputy Governor of Bank Indonesia from 2010 to 2015 and as a Member of the Board of Commissioners of the Financial Services Authority (OJK) from 2012 to 2015, sees the increase in exports as partly influenced by rupiah depreciation, while also showing a positive response from manufacturing output and goods linked to the downstreaming program. However, the tendency of inflationary pressure to rise and the narrowing trade surplus are signals that need to be closely monitored and addressed swiftly and precisely. “The acceleration of exports in April, which jumped by almost 22%, and the increase in processed nickel exports to China by up to 73%, are encouraging developments. This proves that downstreaming can increase domestic added value, and we also hope it will increase foreign exchange supply at a time when our trade surplus is narrowing. Prasasti also sees the establishment of PT Danantara Sumberdaya Indonesia as a strong strategic step to continue encouraging exports and strengthening the country’s foreign exchange reserves. However, this certainly requires swift and precise follow-up measures so that we do not lose direction and momentum in improving our current economic conditions,” Halim explained.
Halim also assessed that rising inflationary pressure stems not only from shortages in several supplies due to the Iran–USA war and volatile food components, but also from the recent depreciation of the rupiah. Therefore, controlling the exchange rate and inflation requires more careful attention, considering that the space to encourage economic growth will become narrower and will require tighter coordination between monetary, financial, and fiscal policy authorities. “The government’s strategy to continue encouraging economic activity will be tested by the market through the ability of the government and Bank Indonesia to maintain rupiah and inflation stability. Measures to increase domestic foreign exchange supply and macroeconomic policy coordination to safeguard Indonesia’s economic fundamentals are viewed by economic actors as highly critical amid today’s elevated economic uncertainty. Policy measures must not end up adding to that uncertainty. For economic actors, policy credibility requires clear targets, well-directed incentives, and consistent implementation,” Halim stated.
Prasasti Policy and Program Director Piter Abdullah added his perspective from the standpoint of price mechanisms and the pulse of economic activity. According to him, although inflation has risen and needs attention, its nature does not reflect an overheated economy. “If we break it down, the drivers of our inflation are volatile food items such as red chili, tomatoes, and shallots. Their character is seasonal, related to supply and weather, not because of an excessive surge in domestic demand. Core inflation itself remains low. So the current price pressure is temporary, not structural,” Piter explained.
BPS data identified red chili, which rose 25.64%, tomatoes at 9.82%, and shallots at 6.65% as the main drivers. Piter also assessed that the government’s move to hold subsidized fuel prices helped ease price pressure.
On the trade side, imports of raw and auxiliary materials rose 24.56% year-on-year in April. Piter sees the increase in imports of raw materials and capital goods not as a burden, but as an encouraging signal. “If what rises is imports of raw materials and capital goods, that is actually good news. Raw materials and machinery are imported because businesses are preparing to produce, and they produce because they see demand ahead. So the shrinking surplus is not an ideal condition, but the cause is not something alarming. This is not a weakening economy, but an economy that is moving,” Piter said.
Regarding the exchange rate, Piter emphasized that pressure on the rupiah cannot be attributed to a single cause, although one factor stands out the most. “The factors are already mixed; we cannot point to just one. But in my view, the biggest influence right now is the beginning of erosion in confidence toward the rupiah. Once sentiment forms, demand for the dollar increases. Even people who do not actually need dollars join in buying them. This speculative and psychological element is what deepens rupiah weakness beyond what can be explained by fundamentals alone,” Piter explained.
Ultimately, Piter views this BPS release as a picture of an economy that remains relatively good overall, but not yet fully balanced. The acceleration of exports and the results of downstreaming are assets worthy of appreciation. However, rising inflation, a shrinking trade surplus, and a widening oil and gas deficit serve as reminders that several economic foundations still need to be maintained.
What is needed going forward is policy consistency and synchronization between fiscal and monetary authorities, so that improvements on the export side can genuinely translate into confidence in the overall direction of the national economy. (*)