In Indonesia, annual GDP growth accelerated to 5.12% in the second quarter from 4.87% in the first three months of the year. This is the best performance since the 2nd quarter of 2023.
This is explained by a strong increase in investments (+6.99%) and the good performance of household consumption (+4.97%). Exports also jumped (+10.67%) before the introduction of the new US tariffs.
Overall, Indonesia's economy is strong and well-positioned to thrive in the new global economic order. The sharp increase in investment also testifies to its international attractiveness.
The best tariff agreement among emerging countries
The trade agreement reached with the United States is favourable for Indonesia's further economic development. At 19%, the new tariffs are the lowest obtained to date by an emerging country. They are only slightly higher than those negotiated by Japan and the European Union (15%).
Thanks to its raw materials, which are sought after by all the world's major economies, and its young population, which is boosting domestic demand, the Indonesian economy will continue to record GDP growth of close to 5% in the coming years.
While the performance of the Jakarta stock exchange has suffered recently from domestic political turmoil and international trade tensions, it remains an interesting small diversification. See our complete portfolio recommendation.