Indonesia’s economic growth faced a brief test as recent demonstrations affected the stock market. The Composite Stock Price Index (IHSG) opened sharply lower by 2.69%, dropping 210.39 points to 7,620.10 at the opening of trading on Monday, September 1, 2025. While the protests raised investor concerns, the government emphasized that these demonstrations are part of a democratic process and assured that economic growth strategies remain on track.
Stock Market Reaction to Protests
The Indonesian stock market reacted swiftly to the demonstrations that have taken place since last week. Investors grew cautious as public protests coincided with key trading sessions. The IHSG’s opening decline reflected short-term uncertainty, yet analysts noted that such volatility is typical during periods of political expression.
Coordinating Minister for Economic Affairs, Airlangga Hartarto, explained, “We hope that investors and issuers understand that freedom of expression is guaranteed in a democracy, as long as it is carried out properly.” This statement aimed to reassure the market that the protests should not deter long-term investment plans.
Read More: Indonesia Protests Impact Economy as Businesses Raise Concerns
Government Growth Strategy Remains on Track
The government growth strategy continues to guide Indonesia through short-term market fluctuations. Airlangga emphasized, “The government will continue active communication with issuers and investors to ensure investment plans are not disrupted and remain on schedule.”
Authorities have reaffirmed their commitment to maintaining stability while respecting democratic expressions. The proactive approach signals to investors that Indonesia prioritizes both economic resilience and civic engagement, balancing growth with social responsibility.
Investment and Consumption Stimulus to Drive Growth
Investment and consumption stimulus remain a cornerstone of Indonesia’s plan to maintain momentum. Airlangga highlighted that the government has prepared several measures, including capital spending by state-owned enterprises, housing programs, and targeted tourism incentives.
“All these programs are rolled out to stimulate the economy directly at the community level while maintaining domestic consumption,” he said. Key initiatives include labor-intensive investment credits for the textile, furniture, and food-beverage sectors, along with housing incentives such as increasing the Housing Financing Liquidity Facility (FLPP) from IDR 20,000 to IDR 350,000 and providing self-help housing assistance for 41,000 homes.
These programs aim to sustain domestic demand and attract continued investment, supporting the overall growth trajectory.
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Investor Confidence and Economic Fundamentals
Foreign investor confidence remains essential as Indonesia navigates short-term challenges. Airlangga urged businesses to remain optimistic, noting that the national economy remains fundamentally strong. The economy grew 5.12% in the second quarter of 2025, inflation remains under control, and the rupiah exchange rate is stable.
“We all have a moral responsibility to this nation to keep the wheels of the economy turning, so that jobs and people’s welfare are preserved. We also call on the public not to be easily provoked by irresponsible information. Let us create a peaceful and respectful atmosphere,” he said.
Strong fundamentals and transparent communication with investors reinforce the message that the country’s growth prospects are secure despite temporary market fluctuations.
Stability and Growth Outlook
Indonesia’s economic growth is expected to remain steady as the Indonesian stock market and the government implement comprehensive strategies. While protests caused short-term market volatility, the combination of investment and consumption stimulus, active communication with investors, and sound economic fundamentals ensures long-term stability. Maintaining investor trust and continuing strategic reforms will help Indonesia sustain growth and secure a resilient economic future.
Source: cnbcindonesia.com, wartaekonomi.co.id
Image: David Gita Roza / Beritasatu
