Volatile Market, RI In Shadow Of 5 Percent Growth Stagnation

Kredit Foto: Sufri Yuliardi

Volatile Market, RI In Shadow Of 5 Percent Growth Stagnation

Saturday, 22 Mar 2025

The market assessed that the direction of the government's economic policy was not very clear and that policies between sectors were not synchronized during the first quarter of 2025. As a result, market confidence was eroded along with the uncertainty of the government's policy.

The plunge in the Composite Stock Price Index (IHSG) which caused trading delays at the opening of the first session, Tuesday (18/3/2025), was one reflection. At the same time, various indicators gave signals of economic weakness to the point of risking economic growth stagnating in the range of 5 percent.

At the market close, the IHSG was at 6,223.39 or down 3.84 percent compared to the previous day's close. This also recorded the worst performance since 2021. In fact, the IHSG had plunged to 6,011.84 at the close of the first trading session.

Associate Director for Research at the Institute for Economic and Social Research (LPEM) Faculty of Economics and Business, University of Indonesia (FEB UI) Jahen Fachrul Rezki said that various macro indicators did show pressure on the domestic economy. This pressure mainly comes from the domestic side.

"This requires special attention from policy makers. Our economy is actually not fundamentally heading towards a crisis, but many government policies and communications have made investor expectations of the economy quite negative. This is reflected in the slowdown in several macro indicators," he said when contacted from Jakarta.

Previously, LPEM FEB UI had conducted a survey related to economic and social conditions, current policy developments compared to the previous period, and evaluation of future policies.

The online survey on February 14-24, 2025 collected opinions from 42 economists with various backgrounds representing various perspectives from domestic and international perspectives.

The results of the LPEM Economic Experts Survey Semester I-2025 found that the majority of experts or 55 percent of respondents agreed that the current economic conditions were worse compared to three months ago. With an average confidence interval of 7.71 points, the survey results also showed a pessimistic view of Indonesia's economic conditions.