Key Takeaways: Indonesia’s Economic Strength

• Stock Market Surge: The Jakarta Composite Index (JCI) has shown remarkable recovery, outperforming major global indexes.
• Investment Growth: Realized investment in Q1 2025 reached Rp 465.2 trillion, a 15.9% increase year-over-year. [1]
• UBS Upgrade: Global financial institution UBS raised Indonesia’s ranking to “overweight,” signaling strong investment confidence.

Jakarta Composite Index (JCI) Leads Global Recovery

Amidst global economic tensions fueled by trade wars, Indonesia’s stock market has emerged as a star performer. As April 8, 2025, the JCI has jumped 10.64%, marking it as the fastest recovering market globally after a downturn triggered by tariff warfare.

This performance surpasses that of developed markets. For instance, the S&P 500 in the United States saw an increase of only 7.89%, while Germany’s DAX index rose by 8.29%, and Japan’s Nikkei by 5.62%.

Investor confidence in Indonesia’s domestic economic stability is a key differentiator.

Investment realization Soars in Q1 2025

The Indonesian economy is experiencing a surge in investment. Minister of Investment/Head of BKPM Rosan Roeslani announced on April 23, 2025, that investment realization in the first quarter of 2025 reached Rp 465.2 trillion, a 15.9% increase compared to the same period last year. [1]

This achievement represents 24.4% of the annual target and has generated 594,104 jobs. Notably,over half of the investment (50.9%) is flowing outside of Java, indicating increasing economic equality across Indonesia.

UBS Raises indonesia’s Ranking to “Overweight”

UBS, a global financial institution, officially upgraded Indonesia’s ranking from “neutral” to “overweight” in its global Equity strategy Report dated April 24, 2025. In stock investment, overweight is used by analysts to recommend buying more of a stock as it is indeed expected to provide higher yields.

UBS views the Indonesian stock exchange as undervalued, approaching its lowest valuation since the pandemic.The institution also projects notable inflows from domestic institutions like BPJS Employment over the next three years.

Key reasons for UBS’s upgrade include:

• Attractive Valuation: The indonesian stock market’s valuation is at a COVID-era low compared to its history and other ASEAN countries.
• Domestic Institutional investment: BPJS employment and other domestic institutions are expected to increase their allocation to the domestic stock market, with UBS estimating inflows of $8.3 billion over the next three years.
• Defensive Market: Indonesia has low exposure to international trade and minimal exposure to the U.S. market, making it a defensive choice amid global uncertainty.
• Positive Sentiment: The UBS analyst team shows the highest positive sentiment in five years regarding Indonesian shares, reflecting confidence in fundamentals and growth potential.
• Reduced Uncertainty: Previous obstacles are subsiding, eliminating a risk factor in the Indonesian capital market.

In essence, Indonesia is seen as an undervalued yet solid market, suitable for defensive and domestic investment strategies amidst global uncertainty.

President Subianto’s Policies Gain Trust

These economic indicators signal that Indonesia’s foundation is not only sturdy but also increasingly recognized globally. This success confirms Indonesia’s attractiveness to global investors and reflects the trust gained by President Prabowo Subianto’s policies.

President Subianto has emphasized the importance of domestic resilience amidst global uncertainty. The recent economic data suggests that this strategy is yielding positive results.

Indonesia is a market with low exposure to international trade and is very minimal on the US market. This makes Indonesia a defensive choice amid the global uncertainty that is being triggered by a trade war.

Maintaining Momentum

The government must maintain this positive momentum and these results. Despite challenging global economic conditions, Indonesia has demonstrated strength and resilience, standing out when many other countries are struggling.

Frequently Asked Questions (FAQ)

why is Indonesia’s stock market performing well?

Investor confidence in Indonesia’s domestic economic stability is growing.

How much did investment increase in Q1 2025?

Investment rose by 15.9% compared to the same period last year,reaching Rp 465.2 trillion.

What does UBS’s “overweight” rating mean?

It signals strong confidence in indonesia’s investment potential and recommends buying more Indonesian stocks.