Monday, July 9, 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 deal with 32% US tariffs

The Indonesian government and entrepreneurs on Tuesday, July 8, 2025 agreed to continue to pursue diplomacy by negotiating with US President Donald Trump in an effort to lower tariffs.

US President Donald Trump has officially set a reciprocal tariff of 32 percent on export products from Indonesia. The policy will come into effect on August 1, 2025, as stated in an official letter sent by Trump to Indonesian President Prabowo Subianto and uploaded through his Truth Social account, 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 BRICS 2025 Summit in Rio de Janeiro, Brazil.

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

Trump has been recorded several times delaying the implementation of tax rates for products coming from other countries. Initially, the tariffs were to take effect on January 9 but were pushed back to July 1. Now, Trump has given another deadline of July 9.

The retreat of the tariff implementation time, said Hasan, can be interpreted that the US provides space for extended discussions and negotiations.

"This means we have a few weeks to negotiate and our nation, our government is very optimistic about the negotiations," Hasan said.

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BI Survey: Consumers Convinced Economic Conditions Maintained

The June consumer confidence index (IKK) is at an optimistic level (with a value above 110), indicating that consumer confidence in economic conditions is maintained, according to the Bank Indonesia Consumer Survey in June 2025 issued on Tuesday (8/7).

The June 2025 CCI stood at 117.8 or higher compared to the index in the previous month with a value of 117.5. 

Executive Director of the BI Communication Department Ramdan Denny Prakosi in a press release on the BI website said that the maintenance of consumer confidence in June 2025 was supported by the Current Economic Conditions Index (IKE) and the Consumer Expectations Index (IEK). 

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

Meanwhile, the June 2025 IEK was recorded at 128.9, relatively stable compared to the index in the previous month of 129.0.

"Indicating consumer confidence in economic conditions is maintained," 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 indicates that if the index is above 100, it is optimistic and below 100, it is pessimistic.

Accelerating Sharia Sector Performance, OJK Establishes KPKS

The Islamic banking industry contributed greatly to the national economy with total assets of Rp980.29 trillion, an increase of nearly 10 percent, and an increase in market share to 7.72 percent. Meanwhile, Islamic financial assets excluding Islamic stock capitalization reached IDR 2,883.67 trillion throughout 2024 or grew 11.67 percent on an annual basis.

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

The Islamic banking industry is also supported by capital that is considered very adequate. The capital adequacy ratio (CAR) of Islamic commercial banks is at the level of 25.27 percent, and Islamic people's financing banks at the level of 20.89 percent, or above the regulatory requirements.

Indonesia itself is ranked 4th in the Islamic Finance Development Indicator 2024 and 3rd in the Global Islamic Fintech Report. Therefore, strengthening strategies need to be carried out thoroughly, including encouraging synergy between the banking sector, capital markets, insurance, guarantees, pension funds, to venture capital and sharia-based microfinance institutions.

As an acceleration step, OJK officially established the Sharia Financial Development Committee (KPKS) which replaced the previous role of the Sharia Banking Committee. This committee serves as a collaboration platform between stakeholders, both internal and external to OJK. OJK Chief Executive of Banking Supervision and Chairperson of the KPKS Dian Ediana Rae said that the formation of this committee was mandated by Law 4/2023 on Financial Sector Development and Strengthening (P2SK Law). 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.

Flooding in the Dry Season? Beware of the Impact!

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

Some of the factors that triggered the wet drought in ink year included the presence 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 allow rain clouds to form and produce rain even though it is generally the dry season. There are several impacts that must be mitigated when there is a wet drought like today:

Negative Impact:

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

Although there are also positive impacts:

• Production Enhancement Opportunities:

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

• Increased Water Availability:

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

Potential Addition of Tourists from Malaysia 

In the last five years, foreign tourists in Indonesia have increased with an average of 7 million arrivals per year. The Central Bureau of Statistics report shows that until May 2025 the number of foreign tourists reached 5.6 million people. In the period 2021 to 2022 foreign tourists experienced a 26 percent increase. 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 experienced a 15-fold increase in 2022 (121,035 people) to 2023 (1.9 million). Then, from 2023 to 2024 foreign tourists from Malaysia increased by 84 percent. 

The consistency of Malaysian tourists coming to Indonesia shows the strong attractiveness of tourism in Indonesia for the 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 nationalities and languages. 

Source: BPS, data processed 

Micro, Small and Medium EnterprisesUMKM) Expo 2025

The implementation of Expo UMKM 2025 is a series in the celebration of the 45th Anniversary of Dekranas on July 9-11, 2025. The celebration will be held at the Balikpapan Sport and Convention Center or Dome Balikpapan, East Kalimantan. The event aims to provide benefits to 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 on Wednesday-Sunday, July 9-13, 2025 The festival will also include a literacy art and story stage, book chat 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 knowledge sharing, but also a means of strengthening global networks in the development of geoparks and geotourism based on conservation and sustainability.

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

Have a good day Chief.

Team SUAR