The Indonesian Central Bank (BI) has projected that the successful negotiation for reduction in U.S. import tariffs on Indonesia’s export products will significantly support the country’s economic growth in the second half of 2025 through enhanced global competitiveness of Indonesian exports.

“The overall impact of the U.S. tariff cut will be positive, including improvements in investment and financial markets,” Juli Budi Winantya, Director of the Department of Economic and Monetary Policy at BI, told an Editor Briefing in Labuan Bajo, East Nusa Tenggara, on Friday, July 18, 2025.

BI forecasts economic growth for the second half of 2025 to range between 4.6 percent and 5.4 percent, with export growth, particularly in labor-intensive industries like textiles, playing a key role in job creation and economic momentum.

In addition to the export boost, the government is set to inject social assistance programs to stimulate household consumption. “Government support such as social aid is expected to drive consumption,” Juli said.

He emphasized the importance of maintaining domestic economic momentum through fiscal stimulus, monetary policy, and government spending, especially amid ongoing global uncertainties. “Domestic growth must be continuously driven as global conditions remain weak,” he cited.

David Sumual, Chief Economist at PT Bank Central Asia (BCA), echoed BI’s optimism, predicting a much stronger second half of the year compared to the first.

“The government is beginning to spend and loosen efficiency measures, making the second half look very different,” David said.

He also praised the U.S. tariff cut, now one of the lowest in Southeast Asia − only behind Singapore and Timor Leste, each with a 10 percent tariff. “This could be our momentum to become a key new supplier for the U.S.,” he said.

He noted the shifting global trade landscape, particularly the U.S.’s efforts to diversify away from China. “The U.S. is looking for new suppliers. This is our chance to expand our exports there,” David concluded.