Overview of the Mission
The International Monetary Fund (IMF) completed its 2025 Article IV Consultation with Indonesia, marking another milestone in the ongoing evaluation of the country’s macroeconomic framework. Led by mission chief Ms. Maria Gonzalez, a team of IMF experts conducted two weeks of in-depth economic discussions with Indonesian authorities, financial institutions, and private sector representatives from November 3–12, 2025. The discussions focused on resilience, growth, and policy credibility amid shifting global conditions.
Key Objectives and Areas of Review
As part of the Article IV process, the IMF team examined Indonesia’s policy mix, fiscal sustainability, monetary settings, exchange-rate developments, and financial sector health. The staff aimed to assess whether the current macroeconomic stance promotes inclusive growth, controls inflation, and preserves external stability. The team also explored structural reforms designed to boost productivity, diversify the economy, and improve public financial management.
Findings on Growth and Stability
The discussions highlighted Indonesia’s resilient growth trajectory supported by robust domestic demand and a favorable external backdrop. However, the staff noted that inflation dynamics and fiscal consolidation remain important considerations. In addition, serial shocks—from commodity price volatility to global monetary policy shifts—underscore the need for flexible policy instruments and credible medium-term planning. The IMF team emphasized the importance of safeguarding macroeconomic stability while continuing to support private investment and job creation.
Policy Recommendations
IMF staff recommendations centered on sustaining macroeconomic stability and strengthening policy frameworks. Key suggestions included:
– Prudent fiscal policy with a focus on efficiency and targeted social spending to protect vulnerable households.
– Transparent and rules-based fiscal frameworks to enhance predictability and investor confidence.
– Flexible monetary policy that adapts to evolving inflation pressures while supporting credit growth in a sound financial system.
– Structural reforms to enhance productivity, labor market participation, and the business climate, including improvements in public investment management and governance.
Financial Sector and External Position
The IMF team assessed Indonesia’s financial sector resilience as solid but highlighted the importance of reinforcing bank balance sheets and ensuring effective macroprudential measures. The external position was described as sound, yet the staff stressed the need for ongoing diversification of the export base and prudent reserve management to cushion potential external shocks.
Risks and Contingencies
Major risks identified include global growth slowdown, commodity price fluctuations, and potential spillovers from adverse financial conditions in advanced economies. The staff urged ongoing vigilance and preparedness, with an emphasis on policy credibility and debt sustainability. In addition, climate-related risks were acknowledged, with calls for integrating climate resilience into macroeconomic planning.
Next Steps and IMF Support
Following the discussions, IMF staff will consolidate findings into a detailed Article IV report, which Indonesia will review with IMF management. The staff’s assessment will inform potential future policy advice and technical assistance programs. The IMF remains committed to providing support to Indonesia through surveillance, targeted technical assistance, and, where appropriate, program-oriented engagement designed to bolster growth while maintaining stability.
Looking Ahead
Indonesia’s policy path will continue to evolve in response to domestic priorities and global developments. The IMF’s ongoing dialogue with Indonesian authorities aims to help sustain macroeconomic resilience, unlock higher productivity, and expand inclusive growth for the Indonesian people.
