Economic Challenges Threaten Indonesia’s Recent Industrial Boom

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Indonesia’s economic expansion is encountering significant headwinds as key industrial sectors face downturns and shifting fiscal priorities create new uncertainties. While resource downstreaming—particularly domestic nickel processing—has driven recent national development, traditional manufacturing and textile industries are confronting mass layoffs and stiff competition from foreign imports. Coupled with a shrinking middle class and rising national spending obligations, these structural pressures threaten to slow the country’s long-term economic momentum.

  • Resource downstreaming policies aimed at processing nickel locally have boosted export revenues, but environmental and foreign regulatory concerns remain challenges.
  • The domestic manufacturing and textile sectors have experienced widespread factory closures and job cuts due to an influx of low-cost imported goods.
  • National economic data indicates a contraction of Indonesia’s middle class, leading to reduced household purchasing power and lower consumer spending.
  • Government fiscal stability is under increased scrutiny following commitments to large-scale public spending programs, including universal school meal initiatives.

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AllSides Media Bias Rating: Center

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DW Newshttps://www.dw.com/
Deutsche Welle is Germany's public international broadcaster, delivering news, features, and documentaries across television, radio, and digital platforms in roughly 30 languages. Although it is funded by the German federal tax budget, DW is legally mandated to operate with strict editorial independence. Its primary mission is to convey a comprehensive picture of Germany, present independent perspectives on global events, and promote the understanding of democratic values internationally.

42 COMMENTS

  1. nothing challenge it so far, only oligarchy are panic same you get in video part of those group…look fact and fundamentals rise over past 7 months, no more imf and the fact Indinesia the most established now in matter of many aspects, remember bio diesel B50 is significantly balancing of oil pice global, and more fact nation asset is significantly increase…..nothing to worry in here 😊

  2. Prabowo starts to force ethnical Chinese businesses to buy government bonds. If everything fails, he will scapegoat ethnical Chinese for screwing up the Indonesia economy. Like Suharto or h.. ither, rob, loot and rape ethnical Chinese.

  3. The elephant in the room is that Indonesian government still heavily subsidises fuel. It's still much cheaper in Indo than in many European countries. If they want fiscal repair they need to strip that band aid off, but of course they know how highly unpopular that will be given their lack of public transport and people's high dependence of fuel

  4. How about the promise of 19 million jobs made during the Prabowo-Gibran election campaign? Until now, it remains unfulfilled. Nothing more than empty promises..
    I think as Indonesian citizens, we are currently heading towards the brink of ruin.

  5. Having tons of nickel and palm oil doesn't mean much, if the government wastes money on cheap politics and messes with the bank.
    If you just rely on selling raw stuff instead of building real industries and honest leadership, you’ll stay stuck broke.

    It’s not a resource problem, it’s a management problem

  6. “As an Indonesian, I believe we should take these warnings seriously, not defensively. Indonesia has enormous potential, but potential means little without productivity, education, technological innovation, strong institutions, and industrial competitiveness. At the same time, Indonesia has a strong economic foundation in its large domestic market, which provides a significant source of demand and makes the economy less dependent on external markets. The next decade will determine whether Indonesia can turn its natural resources, large market, and young population into sustainable prosperity.”

  7. DW complaining about social programs in other countries while Germany's government destroys Germany's social programs is quite funny. Nevermind the great german economic growth that allows it to lecture others on economic policies.

  8. Media barat lagi memantau indonesia guyss. Artinya apa, artinya kita di jalan yang bener. Inget china waktu itu di hajar habis²an sama media barat, salah satunya The Economist, tapi nyatanya china ekonominya maju pesat😂

  9. It has always been under threat since day one because the country has failed to make transformative change that would set it on a higher, sustainable path. The whole edifice remains a house of cards that can come down at any moment. That's the real story: the continued, repeated failure and unwillingness to truly, meaningfully reform

  10. It is safe about the price of oil that does not affect it because Indonesia has a B3 mine in the era of 1980 Giant oil mine ranked 2nd below Saudi Arabia's rating Now if it is drilled again, the price of oil is stable again

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