Indonesia’s stock market has shown resilience amid global economic challenges, with the Jakarta Composite Index (JCI) climbing 0.34% for the week ending July 24. This uptick comes despite persistent withdrawals by foreign investors and mounting international uncertainties. The Indonesia Stock Exchange reported a boost in market capitalization, reaching Rp 10,870 trillion, alongside a significant increase in average daily trading turnover, which soared 41% to Rp 19.76 trillion.
Despite these positive indicators, foreign investors have remained cautious, continuing to sell off Indonesian assets. This trend is evident in the cumulative outflows, which have reached Rp 79.09 trillion for the year. The hesitancy among foreign investors is attributed to rising global oil prices and the introduction of new U.S. tariffs on imports from several countries, including a 10% tariff on certain goods from Indonesia.
The increase in global oil prices, exacerbated by tensions in the Middle East, poses additional challenges for Indonesia’s economic outlook. These developments have raised concerns about potential impacts on the country’s fiscal planning, specifically looking ahead to the 2026 state budget. However, Indonesia’s Finance Ministry has assured that the nation’s overall fiscal stance remains stable despite these pressures.
As the international economic environment remains volatile, market participants in Indonesia are closely monitoring developments. While domestic trading activity has shown strength, the sustained outflow of foreign investments highlights the ongoing cautious sentiment towards the Indonesian market. The country’s ability to navigate these external pressures will be crucial in maintaining economic stability and investor confidence in the months ahead.