Overview of the Mission
An International Monetary Fund (IMF) team led by Ms. Maria Gonzalez conducted the 2025 Article IV Consultation discussions with Indonesia from November 3 to 12, 2025. The mission focused on assessing macroeconomic stability, policy coherence, and the reform path necessary to sustain robust growth amid a dynamic regional and global economy. The IMF team met with senior government officials, central bank representatives, and a broad array of stakeholders in Jakarta and other key centers to evaluate the economy’s resilience and policy space.
Following the discussions, the IMF issued a communique summarizing its preliminary findings and policy recommendations. The mission appreciated Indonesia’s commitment to macroeconomic stability, structural reforms, and inclusive growth, while highlighting areas where policy refinement could strengthen resilience to commodity price cycles, global financial conditions, and domestic risks.
Key Economic Assessments
The IMF’s preliminary assessment notes that Indonesia’s economy has demonstrated capacity for steady growth, with inflation broadly under control and the external position supported by prudent fiscal and monetary policies. The Article IV discussions examined several core pillars:
- Fiscal Policy and Public Investment: The mission emphasized the importance of a transparent, rule-based framework for public investment. It underscored the need to balance investment with long-term debt sustainability and to improve project selection, appraisal, and procurement to maximize the growth dividend from public spending.
- Monetary and Financial Stability: The central bank’s policy framework was praised for anchoring inflation expectations. The IMF highlighted the importance of macroprudential tools to safeguard financial stability and to address credit growth imbalances in a gradual, data-driven manner.
- Growth and Structural Reforms: Structural transformation—particularly in infrastructure, digitization, energy transition, and the labor market—was identified as critical for sustaining higher potential growth. Reform areas include enhancing business climate, competition, and productivity-enhancing policies in both tradable and non-tradable sectors.
- External Sector and Resilience: Managing commodity price volatility and diversifying exports were noted as priorities, alongside strengthening foreign exchange reserves adequacy and external debt management.
Overall, staff assessed Indonesia’s macroeconomic framework as resilient but noted that vulnerabilities remain, especially in the face of global shocks and domestic structural bottlenecks. The IMF stressed the need for credible policy anchors to guide future consolidation and investment cycles.
Policy Priorities and Recommendations
To bolster macro stability and inclusive growth, the IMF recommended a calibrated policy mix emphasizing credible fiscal rules, prudent debt management, and targeted reforms. Key guidelines include:
- Fiscal Policy: Strengthen fiscal rules to improve long-term debt sustainability while protecting essential public investment. Improve project appraisal, selection, and monitoring to ensure investments translate into productivity gains.
- Monetary Policy and Financial Stability: Maintain an inflation-targeting framework with clear communication. Use macroprudential measures to address systemic risks in credit markets while supporting lending to productive sectors.
- Structural Reforms: Accelerate digitalization, streamline business licensing, enhance competition in critical sectors, and implement labor market reforms to raise labor participation and productivity.
- Trade and Investment: Continue diversification of exports, improve logistics, and reduce non-tariff barriers to attract diversified investment and support export competitiveness.
These recommendations are designed to help Indonesia achieve a balanced trajectory of growth that is resilient to external shocks, while preserving fiscal sustainability and social inclusivity.
Next Steps and Collaboration
The IMF and Indonesian authorities will continue to exchange data and policy insights as part of the Article IV process. The staff report, including a detailed assessment of the medium-term macroeconomic outlook and policy recommendations, will be published in due course, following consultations with the Indonesian authorities and the IMF board’s review. The mission affirmed its readiness to provide technical assistance and policy advice to support reforms that align with Indonesia’s development goals and the broader regional stability of Southeast Asia.
Context for Stakeholders
For policymakers, investors, and the general public, the 2025 Article IV Mission highlights a pathway toward sustainable growth through disciplined fiscal management, prudent monetary policy, and targeted structural reforms. Indonesia’s ability to adapt to evolving global conditions—without sacrificing inclusivity and social protection—will determine its longer-run growth trajectory and resilience to shocks.
