Monday, 9 July 2025

Good morning Chief... 

The following is important information related to the development of the business universe that needs attention today based on the curation of the SUAR Team.

Indonesia Uses Strategic Diplomacy to Face 32% US Tariff

The Indonesian government, together with entrepreneurs on Tuesday, July 8, 2025, agreed to continue pursuing diplomacy by negotiating with United States President Donald Trump in an effort to lower the tariff.

United States President Donald Trump officially set a reciprocal tariff of 32 percent on export products originating from Indonesia. This policy will take effect on August 1, 2025, as stated in an official letter sent by Trump to Indonesian President Prabowo Subianto and uploaded via his Truth Social account on July 7, local time.

Head of the Presidential Communications Office, Hasan Nasbi, said that the Indonesian delegation is already in Washington DC while others will follow to the US, including Coordinating Minister for Economic Affairs Airlangga Hartarto, after accompanying President Prabowo Subianto at the 2025 BRICS Summit in Rio de Janeiro, Brazil.

“In the letter, President Trump also stated that there is still an opportunity to discuss (the tariff) to be lowered,” said Hasan, during a press conference in Jakarta.

Trump has been recorded several times postponing the implementation of tax tariffs for products coming from other countries. Initially, the tariff was to be imposed on January 9 but was pushed back to July 1. Now, Trump is giving another deadline, namely July 9.

The postponement of the tariff implementation, said Hasan, can be interpreted that the US is providing space for extending discussions and negotiations.

"This means there are several weeks of opportunity for us to negotiate and our nation, our government is very optimistic about the negotiations," said Hasan.

Continue reading here 

BI Survey: Consumers Confident Economic Conditions Maintained

The Consumer Confidence Index (CCI) in June was at an optimistic level (with a value above 110), indicating consumer confidence in maintaining economic conditions, according to the Bank Indonesia Consumer Survey in June 2025 released Tuesday (8/7).

The June 2025 CCI is at 117.8, higher than the index in the previous month with a value of 117.5. 

Executive Director of the BI Communications Department, Ramdan Denny Prakosi, in a press release on the BI website said that the maintained consumer confidence in June 2025 was supported by the Current Economic Condition Index (CEI) and the Consumer Expectation Index (CEI). 

The June 2025 CEI was recorded at 106.7, higher than the previous month's index of 106.0. 

Meanwhile, the June 2025 CEI was recorded at 128.9, relatively stable compared to the previous month's index of 129.0.

“Indicating consumer confidence in maintaining economic conditions,” he said. 

The Consumer Survey is a monthly survey conducted since October 1999. Since January 2007, the survey has been conducted on approximately 4,600 households as respondents (stratified random sampling) in 18 cities: Jakarta, Bandung, Bodebek, Semarang, Surabaya, Medan, Makassar, Bandar Lampung, Palembang, Banjarmasin, Padang, Pontianak, Samarinda, Manado, Denpasar, Mataram, Pangkal Pinang, Ambon and Banten. 

The index per city is calculated using the balance score method (net balance + 100), which shows that if the index is above 100 it means optimistic and below 100 it means pessimistic.

OJK Forms KPKS to Accelerate Sharia Sector Performance

The sharia banking industry makes a significant contribution to the national economy with total assets of IDR 980.29 trillion, an increase of almost 10 percent, and an increase in market share to 7.72 percent. Meanwhile, sharia financial assets outside of sharia stock capitalization reached IDR 2,883.67 trillion throughout 2024, or grew 11.67 percent annually.

"The performance of the national economy must continue to maintain relatively stable growth, and one of the important pillars is sharia finance," said Chairman of the OJK Board of Commissioners Mahendra Siregar at the inauguration of the Sharia Finance Development Committee (KPKS) and the launch of the 2024 Indonesian Sharia Finance Report (LPKSI), Jakarta, Tuesday, July 8, 2025.

The sharia banking industry is also supported by very adequate capital. The Capital adequacy ratio (CAR) of sharia commercial banks is at 25.27 percent, and sharia people's financing banks are at 20.89 percent, or above the regulator's provisions.

Indonesia itself is recorded to be ranked 4th in the 2024 Islamic Finance Development Indicator and 3rd in the Global Islamic Fintech Report. Therefore, strengthening strategies need to be continuously implemented comprehensively, including encouraging synergy between the banking sector, capital market, insurance, guarantee, pension funds, to venture capital and sharia-based microfinance institutions.

As an acceleration step, OJK officially formed the Sharia Finance Development Committee (KPKS) which replaces the previous role of the Sharia Banking Committee. This committee functions as a collaboration platform between stakeholders, both internal and external to OJK. The Chief Executive Supervisor of Banking OJK as well as Chairman of KPKS Dian Ediana Rae said that the formation of this committee is mandated by Law 4/2023 concerning the Development and Strengthening of the Financial Sector (UU P2SK). KPKS is designed as a comprehensive and effective committee, with a compact organizational structure and high competence. KPKS has three main objectives, namely increasing accountability and transparency, accelerating the preparation of regulations based on sharia principles, and supporting the integration of OJK policies in the development of this sector.

Floods in the Dry Season? Watch Out for the Impact!

Even though it has entered the dry season, light rain and even heavy rain that triggers flooding continues to hit a number of areas in Indonesia in recent days. The Head of the Meteorology, Climatology and Geophysics Agency (BMKG) Dwikorita Karnawati explained that this weather anomaly, commonly called a wet dry season, has been happening since May 2025 and will continue, with above-normal rainfall conditions occurring in most parts of Indonesia until October 2025.

Several factors that trigger the wet dry season this year include the existence of cyclonic circulation in the Indonesian region and the influence of the Madden-Julian Oscillation (MJO) phenomenon. In addition, there are also atmospheric waves such as Kelvin waves, Equatorial Rossby, and Low Frequency. 

These conditions cause rain clouds to continue to form and produce rain even though it is generally the dry season. There are several impacts that must be mitigated if a wet dry season occurs like now:

Negative Impacts:

• Decreased Agricultural Productivity:
• Increased Risk of Pests and Plant Diseases:
• Distribution Disruption:
• Damage to Agricultural Infrastructure:

Although there are also positive impacts:

• Opportunity to Increase Production:

If rainfall is not excessive and is managed properly, rain in the dry season can be an opportunity to expand planting areas and increase agricultural production, especially if there is an adequate irrigation system. 

• Increased Water Availability:

Rain can help replenish groundwater sources and reservoirs, which is important for irrigation and other clean water needs, especially in areas experiencing drought. 

Potential for Additional Tourists from Malaysia 

In the last five years, foreign tourists in Indonesia have increased with an average of 7 million tourist arrivals per year. The Central Statistics Agency report shows that as of May 2025, the number of foreign tourists reached 5.6 million people. In the period 2021 to 2022, foreign tourists increased by 26 percent. In 2024, the number of foreign tourist arrivals even reached the highest peak of 13.8 million people.

Tourists from Malaysia are the most consistent tourists coming to Indonesia since 2020. The arrival of tourists from Malaysia increased 15 times in 2022 (121,035 people) to 2023 (1.9 million). Then, from 2023 to 2024, foreign tourists from Malaysia rose 84 percent. 

The consistency of Malaysian tourists coming to Indonesia shows the strong appeal of tourism in Indonesia for citizens of this neighboring country. The opportunity to increase the number of citizens of this neighboring country coming to Indonesia is still wide open due to many factors, especially the similarity of ethnic groups and language. 

Source: BPS, data processed 

Micro, Small, and Medium Enterprises (UMKM) Expo 2025

The UMKM Expo 2025 is part of the 45th Dekranas anniversary celebration on July 9-11, 2025. The celebration will be held at the Balikpapan Sport and Convention Center or Dome Balikpapan, East Kalimantan. This event aims to benefit the sustainability of the local craft industry, in order to expand the marketing of traditional works.

Jogja Literacy Festival 2025

This event will be held collaboratively from Wednesday to Sunday, July 9-13, 2025. The festival will also feature arts and literacy story performances, book talk sessions, and sinau bareng. 

6th Geofest and International Conference 2025

Kebumen Regency will host The 6th Geotourism Festival (Geofest) and International Conference 2025, on July 9-12, 2025, in the Kebumen UNESCO Global Geopark area. With the main theme "Discover Geological Wonders: Promoting Geotourism and Resilience", this event is not only a forum for sharing knowledge, but also a means of strengthening global networks in the development of geoparks and geotourism based on conservation and sustainability.

China RSPO Forum 2025: We are pleased to announce that the China Sustainable Palm Oil Forum 2025 (9th China RSPO Forum) will be held on July 9 at the Shangri-La Hotel in Guilin, Guangxi, China. The forum will be co-hosted by RSPO and the China Chamber of Commerce of Foodstuffs, Native Produce and Animal By-Products (CFNA).

Have a great day, Chief.

Team SUAR