ASIATODAY.ID, TANGERANG — Coordinating Minister for Economic Affairs Airlangga Hartarto warned that Indonesia remains vulnerable to global economic shocks despite its current positive indicators.
Speaking at the 16th Kompas 100 – CEO Forum in Tangerang on Wednesday, November 26, 2025, he urged all sectors to accelerate transformation to strengthen long-term resilience.
Airlangga emphasized that Indonesia cannot rely solely on momentum and must continue building economic self-reliance.
“Our economy is not crisis-proof. Without innovation and accelerated transformation, we can be hit by external shocks at any time,” he stressed.
Stable Growth, but Global Risks Persist
Indonesia’s economy expanded by 5.04% in the third quarter of 2025, with October inflation contained at 2.86% (yoy). Consumer optimism strengthened with a CCI of 115, while the manufacturing sector remained expansive with a PMI of 51.2. The trade surplus continued for 65 consecutive months, reaching USD 4.34 billion in September 2025.
Yet, Airlangga noted that robust numbers alone do not guarantee immunity.
“The economy is like a racing team. It needs constant tune-ups—fast, adaptive, and responsive. The Covid-19 pandemic showed us the importance of knowing when to hit the gas and when to brake,” he said.
Downstreaming as the Backbone of Economic Resilience
Airlangga underscored downstream industrialization as Indonesia’s main shield against global volatility. Between January and September 2025, investment realization reached:
IDR 1,434.3 trillion (up 13.7%)
1.95 million jobs created
IDR 431.4 trillion in downstream investments (30.1% of total)
Downstreaming not only boosts value-added production but also positions Indonesia for future industries such as EV batteries and semiconductors—an industry projected to hit USD 1 trillion by 2030.
Digital Transformation: Essential to Stay Competitive
Indonesia’s digital economy reached USD 90 billion in 2024 and is expected to soar to USD 360 billion by 2030. Digital finance remains a key driver: 57 million QRIS users, 39 million QRIS merchants (93% MSMEs).
According to Airlangga, digital transformation must be supported by strong infrastructure, particularly data centers. Indonesia requires up to 2,700 MW in capacity, while current availability is only around 500 MW.
“AI needs energy and water. Indonesia has both. Our potential to become the region’s largest data hub is enormous,” he added.
The government is expanding data center networks through cross-investment partnerships with Singapore, Johor, and Riau.
Energy Transition Risks and the Need for ASEAN Power Grid Integration
Indonesia also faces major challenges in its energy transition. Airlangga emphasized the urgency of accelerating the ASEAN Power Grid (APG) to connect electricity supply across Southeast Asia. Strengthening the interconnection of Java, Sumatra, and the Riau Islands is among the government’s priorities.
Without an aggressive energy transition, Indonesia’s economic vulnerability to external turbulence will intensify.
National Collaboration as the Foundation of Long-Term Resilience
Airlangga called for collective action through the concept of “Indonesia Incorporated”—ensuring government, business, and the investment ecosystem move in a unified direction. This alignment, he said, is crucial for Indonesia’s presence in international forums such as ASEAN, APEC, and the G20.
CORE Outlook 2026: Resilience Holds, Acceleration Stalls
Meanwhile, the latest CORE Indonesia report forecasts Indonesia’s economic growth at 4.9%–5.1% in 2026, signaling resilience but limited acceleration.
CORE Executive Director Mohammad Faisal said economic signals for 2026 remain weak, potentially even more challenging than 2025.
“Net exports will decline. There will be marginal increases in government spending, household consumption, and investment, but not enough to offset the narrowing of net exports,” he explained.
Consumption and Investment Still Weak
Consumer credit growth weakened from 10.2% (February) to 6.9% (October 2025)
Sales of medium and large homes contracted -12% and -23%
Foreign investment declined -1% in Q1–Q3 2025
Domestic investment grew 30%
Senior economist Hendri Saparini noted that Indonesia has remained stuck at around 5% growth for too long. A major economic leap can only occur through inclusive industrialization.
“Countries that break through—like South Korea—maintain a very high share of manufacturing in GDP,” she said.
Political expert Burhanuddin Muhtadi added that political and security stability are fundamental prerequisites.
“Ideally, Indonesia should pursue balanced diplomacy—maintaining good relations with all major powers without being trapped in any particular bloc,” he noted.
Opportunities Are Large, but So Are the Risks
Taken together, the government’s warning and CORE’s projections reinforce a single message: Indonesia remains vulnerable to global shocks. Although the fundamentals are stable, growth acceleration is not yet assured.
To avoid being dragged into global turbulence, Indonesia must accelerate:
Downstream industrialization
Digital transformation
Energy transition
Development of data centers and digital talent
Manufacturing-led industrialization
Political stability and balanced diplomacy.
(AT Network)
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