Indonesia's Export Outlook Remains Positive Despite US Reciprocal Tariff Policy

Indonesia's central bank, Bank Indonesia, remains confident in the country's export performance, citing lower tariffs imposed by the United States as a key factor in maintaining external stability and boosting investor confidence. According to the Director of the Economic and Monetary Policy Department at BI, Juli Budi Winantya, the lower tariffs are expected to drive stronger investment and economic growth. Despite the potential risk of additional tariffs on transhipment, the central bank believes Indonesia's export outlook will remain positive.

Key Takeaways:

• Bank Indonesia expects exports to increase in the future due to lower tariffs imposed by the US, with market confidence higher as a result of the reduced tariffs.
• Indonesia's tariff rate has been reduced from 32 percent to 19 percent, while some countries, such as India and Switzerland, now face higher tariffs than initially announced.
• The central bank acknowledges that the current account will still post a deficit, but at a low level ranging from 0.5 to 1.3 percent of GDP, which is considered healthy and unlikely to disrupt external stability.
• The current account deficit in the second quarter of 2025 stood at US$3.0 billion (0.8 percent of GDP), up from US$0.2 billion (0.1 percent of GDP) in the first quarter.
• Bank Indonesia projects that domestic demand will increase in line with government spending on various programs that are expected to boost economic growth in the second half of 2025.
• The government is also providing additional fiscal stimulus measures aimed at boosting domestic consumption and economic activity.
• Bank Indonesia has adjusted its benchmark interest rate five times between September 2024 and August 2025, each by 25 basis points, and increased liquidity through the Macroprudential Liquidity Incentive Policy.

Statistics:

• 0.5-1.3 percent: The projected current account deficit as a percentage of GDP in 2025.
• US$3.0 billion: The current account deficit in the second quarter of 2025.
• 0.8 percent: The current account deficit as a percentage of GDP in the second quarter of 2025.
• 0.1 percent: The current account deficit as a percentage of GDP in the first quarter of 2025.
• 4.6-5.4 percent: The midpoint range of economic growth in 2025, to which Bank Indonesia expects to keep growth.

Sources:

• Bank Indonesia (BI)
• Juli Budi Winantya, Director of the Economic and Monetary Policy Department at BI
• Antara News, August 22, 2025