The S&P Global US Manufacturing PMI stood at 50.2 in April 2025, unchanged from the previous month. It indicates only marginal expansion, as output declined for the second consecutive month despite a fourth month of growth in new orders, mainly driven by domestic demand. However, export orders have fallen sharply since November due to tariff-related pressures and expectations of retaliatory tariffs, significantly reducing export sales. As a result, business confidence dropped to its lowest level since June 2024. Additionally, both input costs and output prices surged, mainly due to tariffs, prompting firms to raise selling prices and reduce headcount to protect profit margins.

Indonesia's economic growth, as measured by Gross Domestic Product (GDP), was recorded at 4.87% year-on-year (YoY) in 1Q25, down from 5.02% YoY in 4Q25 and below the market consensus of 4.91% YoY. The nominal GDP in 1Q25 stood at IDR 5,665.9 trillion, while the GDP at constant prices was IDR 3,264.5 trillion. All expenditure components posted growth except for government spending, which contracted by 1.38% YoY due to budget efficiency policies at the central government level. The most significant contributor to GDP was household consumption, accounting for 54.53% of total GDP and growing by 4.89% YoY. Gross Fixed Capital Formation (GFCF), which represents investment in capital goods with a useful life of more than one year and is not for immediate consumption, contributed 30.34% to total GDP and grew by 2.12% YoY

Indonesia’s Consumer Price Index (CPI) recorded an annual inflation rate of 1.95% year-over-year (YoY) in April 2025, up from 1.03% YoY in March 2025. This realization exceeded the consensus estimate of 1.50% YoY. Core inflation increased slightly to 2.50% YoY in April from 2.48% YoY in March. Key contributors to core inflation included gold jewelry and automobiles. Meanwhile, the volatile food group saw inflation of 0.64% YoY in April, mainly driven by higher prices for bird’s eye chili, red chili, shallots, garlic, and coconut. The administered prices group posted a 1.25% YoY inflation rate, mainly from tap water tariffs, machine-made kretek cigarettes, and hand-rolled kretek cigarettes

U.S. economic growth contracted by 0.30% QoQ in the first estimate for 1Q25, down from 2.40% in 4Q24, according to the U.S. Bureau of Economic Analysis, and fell short of market expectations for a 0.3% QoQ expansion. This contraction aligns with a slowdown in the headline inflation indicator, the Personal Consumption Expenditure (PCE) Index, which eased to 2.30% YoY in March 2025 from 2.70% YoY in February 2025. Meanwhile, the unemployment rate in April 2025 is expected by market consensus to remain stable at 4.2%, after a slight increase from 4.2% in February 2025 to 4.2% in March 2025, with the official release scheduled for today (5/2).

Indonesia's Money supply in broad terms (M2) slowed to 6.1% Year-over-Year (YoY), reaching IDR 9,436.4 trillion in March 2025, from 6.2% YoY in February 2025 (Figure 1). By component, the expansion of M2 was driven by the growth of narrow money (M1) at 7.1% YoY and quasi-money at 3.0% YoY in March 2025. The development of M2 was supported by the 55.9% growth in M1, which consisted of an 11.5% increase in currency outside commercial banks and rural banks (BPR) and a 44.4% rise in rupiah demand deposits, encompassing electronic money and withdrawable rupiah savings. Meanwhile, on a monthly basis, the broad money supply (M2) increased by 1.7% (MoM), in line with inflation in March 2025, which coincided with the month of Ramadan and the end of the 50% electricity tariff discount for customers with power connections below 2,200 VA.

Bank Indonesia's Board of Governors Meeting (BGM) held the BI rate at 5.75% on March 23, 2025. The Deposit Facility (DF) rate remains at 5.00%, and the Lending Facility (LF) rate stands at 6.50%. This decision ensures inflation remains controlled within the target range of 2.5±1% for 2025 and 2026.Bank Indonesia also focuses on maintaining a stable and market-friendly Rupiah exchange rate. It involves open market operations in the spot market, the domestic non-deliverable forward (DNDF) market, and Government Securities (SBN) purchases in the secondary market to safeguard financial market stability and ensure adequate banking liquidity. Furthermore, the decision seeks to enhance the effectiveness of pro-market policies in money and foreign exchange market transactions. It also encourages foreign capital inflows by maintaining an attractive interest rate structure and FX swap framework for investment in domestic financial assets. Additionally, Bank Indonesia is strengthening its Macroprudential Liquidity Policy (KLM) to boost credit and financing growth, particularly for Micro, Small, and Medium Enterprises (MSMEs) and labor-intensive sectors. This initiative aims to create jobs and support sustainable economic growth.

Indonesia's trade balance surplus (NPI) increased by 39.68% MoM to US$ 4.33 billion in March 2025 (Figure 1). This rise was supported by a non-oil and gas surplus of US$ 6.00 billion in March 2025, which saw a 24.22% MoM increase. Key contributors to this surplus included animal and vegetable fats and oils, mineral and vegetable fuels, and iron and steel. Meanwhile, the oil and gas trade balance recorded a deficit of US$ 1.67 billion in March 2025, primarily due to crude oil and petroleum products. Indonesia has maintained a trade surplus for 59 consecutive months since May 2020.

The Consumer Confidence Index (CCI) fell 5.3 points to 121.1 in March 2025, down from 126.4 in February 2025. This decline was driven by a 7-point drop in the Consumer Expectations Index (CEI) to 131.7 in March 2025 and a 3.6-point decrease in the Current Economic Conditions Index (CECI) to 110.6 in March 2025 (Figure 1). All components of the CEI experienced declines, with the most significant decrease observed in the Job Availability Expectations Index, which fell 8.3 points to 125.9 from 134.2. It follows recent widespread layoffs (known locally as PHK) undertaken by many companies due to several factors, including decreased demand, bankruptcy, and production relocation.

Indonesia's foreign exchange reserves grew by 1.68% MoM to US$157.1 billion in March 2025, up from US$154.1 billion in February 2025. The increase was driven by tax and service receipts and government external debt withdrawals amid the Rupiah exchange rate stabilization policy implemented in response to heightened global financial market uncertainty. Furthermore, the current position of foreign exchange reserves remains high, equivalent to financing 6.7 months of imports or 6.5 months of imports and government external debt payments, exceeding the international adequacy standard of approximately 3 months of imports.

U.S. recorded a deflation of 0.1% MoM in March 2025, down from an inflation rate of 0.2% MoM in February 2025, contrary to market expectations of a 0.1% MoM inflation. It was influenced by a 2.4% decrease in the energy index in March 2025, which saw an offset between a decline in the gasoline index and an increase in the electricity and natural gas indices. Meanwhile, the food index rose to 0.5% MoM in March 2025. Additionally, core inflation, which excludes food and energy, decreased by 10 basis points to 0.1% MoM in March 2025 from 0.2% MoM in February 2025 (Figure 1). It was due to a 1.4% MoM decline in the transportation services index.