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Economy Starting to Recover, But Watch the "Price" Behind It

As we enter August 2025, Indonesia's economy brings us some important news. On one hand, there are signs of recovery. But on the other hand, there are consequences from trade agreements and pressure from pricing. Let's discuss this together!

New Tariffs from the US, Major Commitments from Indonesia
Since 1 August, the reciprocal tariff between Indonesia and the US is now in effect. Indonesian goods are now subject to a 19% tariff, down from the previous 32%. However, this tariff reduction comes with a "price".

In return, Indonesia has provided several concessions:
- 99.3% of goods from the US are exempted from tariffs.
- Relaxation of TKDN (Local Component Level) rules.
- Commitments to purchase energy, agriculture, and aircraft products from the US totalling $22.7 billion.

According to several economists, the impact on Indonesia's economy remains moderate:
- Economic growth is projected to decline by -0.2% (2025F: 4.8%).
- State revenue is reduced by Rp 17 trillion (0.6% of the state budget).

Manufacturing Sector Has Not Fully Recovered
Indonesia's PMI for July was recorded at 49.1, up from 46.9 in the previous month. However, this figure remains below 50, meaning Indonesia's manufacturing sector is still in contraction for the past 4 months. This reflects that demand and production activity have not fully recovered.

Inflation Rising, Driven by Gold and Food Prices

Inflation in July increased to 2.37% (from June: 1.87%), driven by rising gold prices and essential commodities:
- Gold prices rose, contributing +0.46%.
- Red onion prices rose +59.3% YoY.
- Rice prices rose +4.0% YoY.

Although still within the BI target, this trend needs to be monitored as it could affect consumer purchasing power.

Trade Surplus Remains Consistent

There's good news as well: Indonesia's trade balance has remained in surplus for 62 consecutive months.
- June surplus: $4.1 billion (slightly down from May: $4.3 billion).
- Exports rose +11.3% YoY, led by CPO products (+22.1%).
- Imports rose +4.3%, mainly machinery and equipment (+21.0%).

This means Indonesia is still generating net income from international trade.

What Does This Mean for Investors?
Economic recovery is indeed beginning to be felt, but it is full of challenges. From populist government policies, inflationary pressures, to a slowdown in manufacturing, all of this indicates that investors need to remain cautious yet optimistic.

Time to Stay Diversified Through Mutual Funds

In the midst of these diverse economic conditions, one of the wisest ways to continue growing is by investing in mutual funds.

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Syailendra Fixed Income Fund (SFIF)

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Syailendra Equity Opportunity Fund (SEOF)
Syailendra Alpha Focus Equity Fund (SAFE)

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Syailendra Sharia Fixed Income Fund (SSFIF)
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