JAKARTA: Indonesia’s economic growth this year will likely stay around 5 per cent despite trade tensions, its finance minister said on Thursday (Apr 24), stressing a government delegation was still negotiating terms with Washington to try to avoid reciprocal tariffs.
The minister’s outlook is roughly the same growth pace as last year’s 5.03 per cent. The government’s target is 5.2 per cent this year and President Prabowo Subianto has pledged to lift growth to 8 per cent by 2029.
Sri Mulyani Indrawati’s remarks came at an online press conference of Indonesia’s stability board, which consists of its finance minister, central bank governor, head of financial services authority and head of deposit insurance corporation.
The minister and Bank Indonesia Governor Perry Warjiyo were in Washington to attend IMF-World Bank meetings.
A delegation led by chief economic minister Airlangga Hartarto was also in the US capital trying to conclude trade talks within 60 days since its Apr 17 meetings with US trade officials.
In those meetings, Indonesia has offered to buy more American products as well as cut its own non-tariff barriers so that the United States would not apply a 32 per cent tariff on its exports.
“The government will actively conduct early mitigation, including communicating with the US government and, as instructed by the president, will continue deregulation efforts to reduce trade barriers,” Sri Mulyani said.
“Efforts will also continue to protect domestic demand,” she added.
Indonesia’s financial markets have been hit by capital outflows since the US announcement of reciprocal tariffs in early April. Sri Mulyani said the rupiah’s movements against the US dollar are expected to be stable
Indonesia’s exports to the United States only accounts for just about 2 per cent of its gross domestic product, the government has said, but spillover impact from the trade war could hurt its economy more.
Key exports to US include electronics, apparel and footwear.
https://www.channelnewsasia.com/business/indonesia-2025-growth-seen-around-5-despite-trade-tensions-finance-minister-says-5085426
