AGP Executive Report

Rupiah & growth pressure: The World Bank expects Indonesia’s growth to slow to 5% in 2026, citing fiscal strain from big spending and higher fuel-subsidy costs after the Iran war, with limited room to maneuver as the rupiah weakens. Fuel & cost of living: Indonesia’s retail sales fell 3.2% year-on-year in May, with food and telecom equipment among the biggest drags—another sign of household pressure. Free meals overhaul: The government says the MBG program’s kitchen network jumped to 27,877 units, up 6,877 from the plan, and will be restructured within a month after concerns about incentive spending. Bali waste sorting: Bali is now a national pilot for 100% waste segregation, with residents required to sort waste starting July 1, after earlier “shock therapy” landfill rules cut waste volumes. Maritime security: Indonesia’s Navy stepped up patrols in the North Natuna Sea after reports of foreign fishing vessels, while also foiling a rare-earth smuggling attempt near Batam. AI & data centers: STT GDC says it’s expanding Jakarta capacity for AI workloads, adding more facilities and building a 360MW+ pipeline. Sports: Indonesia qualified for the Women’s T20 Asia Cup after crushing Oman in the ACC Premier Cup quarter-finals. Crime & immigration: Bali immigration arrested an Australian Interpol fugitive trying to leave on a forged Brazilian passport, as authorities vow to keep Bali from becoming a criminal hideout.

Rupiah & Fuel Costs: Bank Indonesia’s surprise rate hike is feeding into higher living costs as Pertamina raises Pertamax by 32% to Rp16,250/litre, with analysts saying inflation impact may be limited but the fiscal squeeze is real. QRIS Cross-Border Payments: BI is expanding QRIS cross-border payments to Saudi Arabia and India to help Indonesians abroad and boost tourism, including for umrah and hajj. Court Verdict: Indonesia’s military court jailed four officers, up to three years, over an acid attack on rights activist Andrie Yunus, with defendants expected to appeal. Climate Disaster for Wildlife: New research links Sumatra floods and landslides to the deaths of about 58 Tapanuli orangutans, pushing the species closer to extinction. Tech & Energy Pressure: A UN report warns AI data centres could consume huge electricity and water by 2030, raising concerns for water-stressed regions. Sports & Culture: Indonesia Open champions Goh Sze Fei-Nur and Nur Izzuddin say they’re staying “hungry” for bigger titles, while a new giant panda cub Rio makes a public debut in West Java.

Military Justice: Indonesia’s military court sentenced four BAIS officers to up to three years in prison for a March acid attack on human rights activist Andrie Yunus, with judges calling the act “arrogant” and rights groups warning the case may not have identified planners. Fuel & Cost of Living: Pertamina raised Pertamax gasoline prices by about 32%, while lawmakers and the government weigh stimulus options to cushion consumers from the impact on inflation and household spending. Rupiah & Rates: Bank Indonesia signalled it’s willing to let bond yields rise to stabilize the rupiah, after an emergency rate hike and investor briefings; BI also expects 2027 growth at the upper end of 5.1–5.9%. Healthcare Push: President Prabowo ordered “absolute zero tolerance” for corruption in public hospitals and said the state will build or renovate 300–400 hospitals nationwide in three years, alongside distribution of nearly 1,000 medical equipment units. Regional Diplomacy: Indonesia’s foreign minister met Myanmar’s president in Nay Pyi Taw, discussing ASEAN cooperation and support for Myanmar’s peace process. Climate & Economy: BMKG said El Niño-linked dry conditions could boost salt and fisheries output, though risks of a strong El Niño remain.

Central Banking & Markets: Bank Indonesia surprised investors with an off-schedule 25-basis-point rate hike to 5.50% to defend the rupiah and keep inflation on target; the rupiah bounced to about Rp18,058 per US dollar and the Jakarta Composite Index jumped after the move. Energy Trade Governance: The Trade Ministry will centralize coal exports under state-owned PT Danantara Sumberdaya Indonesia (PT DSI), with a staged transition through end-2026 and full exclusive control from Jan 1, 2027. Disaster Watch: A 5.1-magnitude quake hit Indonesia’s Talaud Islands, while the wider region remains on alert after the Philippines’ deadly 7.8 quake and tsunami warnings. Defense & Regional Debate: A proposed US C-130 maintenance repair hub in West Java is sparking debate over what Indonesia gains and loses. Digital & Green Cooperation: Singapore and Indonesia reaffirmed plans to deepen ties on digital infrastructure, green energy, and industrial cooperation, including a joint study for the Batam-Bintan-Karimun tech sector. Sports & Media: Laos became the eighth ASEAN country to secure FIFA World Cup 2026 broadcast rights, with all matches free on LaoTV.

Central Banking Shock: Bank Indonesia delivered an off-cycle 25-basis-point rate hike to 5.5% to defend the rupiah after it slid past 18,000 per US dollar, citing high global volatility and aiming to keep inflation in the 2026-2027 target range. Disaster Response: A powerful 7.8 quake off Mindanao killed at least 37 people and displaced over 20,000, with tsunami warnings later lifted; hospitals in hard-hit areas moved patients back inside after safety checks. Food Security Push: The Agriculture Ministry and BRIN signed an MoU to speed agricultural research and downstream innovation for food self-sufficiency, while the government also plans 100 post-harvest storage units to stabilize supplies and prices. Cross-Border Cooperation: Indonesia and Singapore expanded ties on investment, digital economy and green energy in the BBK region, including a solar project targeting 200 MW. People Protection: Indonesia opened a migrant worker helpdesk in Batam to guide departures and reduce trafficking risks, and rolled out a roadmap to protect children online through 2029. Sports & Culture: Persija Jakarta appointed Shin Tae-yong as head coach for 2026/27, and Indonesian rock band Radja announced its 25th-anniversary stadium concert in Kuala Lumpur on 11 July.

Philippines Quake Fallout: A 7.8-magnitude earthquake off southern Mindanao killed at least 35 people and injured more than 200, with collapsed buildings and a landslide in Sarangani province; tsunami warnings were briefly issued across the region before Indonesia lifted its alert after recording small waves. Indonesia–Kuwait Ties: Indonesia’s ambassador met Kuwait’s Awqaf minister to boost cooperation in religious and cultural affairs. Energy & Industry: APAC data center developer DayOne signed a 1.5GW renewable supply deal with Malaysia’s TNB, while Indonesia is weighing export-rule exemptions for commodity traders. Digital Governance: Asia-Pacific regulators are stepping up action against “dark patterns,” pushing platforms to change misleading interface designs. World Economy Watch: Wall Street closed mixed as Asian markets sank, with investors reacting to shifting regional signals. Sports: Indonesia qualified for the FIBA U18 Women’s Asia Cup 2026 Division B after the Philippines won its title.

Disaster Response: Indonesia lifted its tsunami warning hours after ordering evacuations for northern areas following a 7.8 quake off the southern Philippines; BMKG later reported small waves in at least nine Indonesian locations, with the highest at 0.75m on Sangihe, while residents in Manado, northern Gorontalo and Sangihe were told to move to higher ground. Philippines Quake Toll: The Mindanao earthquake has killed at least 15 and injured 129, with collapsed buildings reported in General Santos and tsunami alerts also reaching parts of the region before being downgraded. Markets & Currency: Investor confidence is wobbling as Indonesia’s rupiah slides and markets rout further; foreign reserves fell to $144.9bn in May, and coverage points to a “doom-loop” risk tied to policy moves. Energy Deal: Eni and Petronas launched a 50-50 gas-focused joint venture, Searah, spanning 14 assets in Indonesia and five in Malaysia, targeting growth beyond 500,000 boe/d and over $20bn in investment. Trade & Food: Saudi Arabia reinstated shrimp import permits for four Indonesian exporters after Cs-137 concerns, while Kopi Kenangan keeps expanding as a homegrown Starbucks challenger. Security: Two Russian nationals were arrested in Bali after a high-speed chase over alleged hashish smuggling.

Indonesia Open Badminton: Canada’s Victor Lai beat home favorite Jonatan Christie in the men’s singles final in Jakarta, while Malaysia’s Nur Izzuddin–Sze Fei and Goh Sze Fei–Nur Izzuddin pairs fought back to win the men’s doubles, ending Malaysia’s 18-year title drought at Istora Senayan. Sports—Gilas: The Gilas Pilipinas girls swept the FIBA U18 SEABA qualifiers, routing Indonesia 88-62 to book the next Asia Cup berth. Volcano & daily life: NPR reports on Javanese Jathilan rites near Mount Merapi, showing how tradition continues even in Indonesia’s high-risk volcanic zones. Identity & belonging: A personal essay explores being Indonesian and Muslim abroad, including the everyday questions and prejudice that come with visible differences. Maritime safety: A container feeder, Golden Star 1, sank off Batam in the Strait of Singapore; all nine crew were rescued and Indonesia’s coast guard is monitoring floating-container hazards. Free meals shake-up: Indonesia’s MBG program faces a major test after leadership reshuffles and corruption probes tied to the scheme. India–Indonesia ties: Foreign ministers Jaishankar and Sugiono co-chaired the 8th Joint Commission Meeting, pushing defence, maritime security, digital connectivity and trade ahead of Modi’s Jakarta visit.

Education Push in Bali: President Prabowo urged students in the tuition-free Sekolah Rakyat program to focus on discipline, respect, and resisting bullying, while also ordering faster expansion in Bali after overcrowding. Free Meals Infrastructure: Indonesia’s Public Works Ministry says it has completed 222 kitchen units for the MBG nutritious meals program across 30 provinces, with handovers underway. People’s School Build-Out: Phase II Sekolah Rakyat construction is accelerating toward the 2026/2027 school year, with several sites in Central Java and Bengkulu reporting over 85% progress. Disaster Recovery Funding: Indonesia’s disaster recovery task force urged ministries to speed up budget allocation and disbursement for flood and landslide rehabilitation in Aceh, North Sumatra, and West Sumatra, targeting completion by 2028. Strategic Exports Rule: Prabowo signed PP 24/2026 requiring exports of key strategic commodities—starting with coal and palm oil—to be handled by appointed state-owned enterprises. Currency Watch: Indonesia is mentioned among countries stepping up action as regional currencies face pressure, with South Korea also rolling out measures to curb won speculation.

Indonesia–Cuba Tourism Shock: Indonesian hotel chain Archipelago International confirms it has exited Cuba, citing US sanctions and a deadline tied to GAESA, dealing another blow to the island’s struggling tourism sector. Trade & Logistics: Global air cargo demand dipped as holidays hit volume, but pricing rose slightly; capacity also shrank, with the biggest drops in the Middle East & South Asia and Africa. Waste & Air Quality: A new study links China’s plastic waste import ban to worse air pollution in Indonesia, suggesting wealthy countries rerouted trash and more of it ended up burned. Nickel Market Watch: Analysis says Indonesia is shifting toward “value over volume,” aiming for pricing power and a possible price floor as a “green premium” emerges for low-carbon nickel. Aid Route Disruptions: WFP says fortified biscuits reached Afghanistan after a 15,000 km detour through nine countries due to border closures and blocked sea routes. Sports (Indonesia Open): Malaysia’s Goh Sze Fei–Nur Izzuddin upset world No.1 Kim Won Ho–Seo Seung Jae to reach the Indonesian Open final. Road Safety: Five killed in a crash on the Pekanbaru–Dumai toll road in Riau.

School Revamp: Indonesia targets revitalizing 71,744 schools nationwide in 2026, with East Kalimantan set to receive upgrades for 341 eligible schools, as the government pushes safer, better learning facilities. Rupiah & Markets: Finance Minister Purbaya Yudhi Sadewa says Indonesia is not heading toward a 1997-98-style crisis, blaming market “negative sentiment” for rupiah and stock weakness; Bank Indonesia and the Finance Ministry also agreed to boost asset yields and portfolio inflows to stabilize the currency. Defense Ties: Indonesia and Malaysia moved to deepen military cooperation, including joint training plans under ASEAN defense forums. Climate Warning: The WMO says El Niño is highly likely to develop between June and August and could persist through at least November, raising drought and extreme weather risks. Waste-to-Energy Push: Indonesia is accelerating waste-to-energy projects, with three sites near groundbreaking and more locations lined up for operations starting in 2028. Environment Drive: The government launched the ASRI Movement to push climate justice and cut the “triple planetary crisis” from households upward. Shipping Incident: A container vessel sank off Batam; all nine crew were rescued and Singapore says no oil pollution has been reported. Anti-Graft: KPK opened a probe into alleged bribery tied to banking notification services at BRI and Telkom.

Indonesia–China Ties: Indonesia reaffirmed its one-China principle, saying it’s consistent with official documents and a 2024 joint statement. Public Finance & Markets: Finance Minister Purbaya Yudhi Sadewa denied resignation rumors, telling lawmakers and investors the state budget remains stable. Immigration Overhaul: Indonesia ended fast-track processing for foreign limited and permanent stay permits, citing reforms and procedures that previously enabled speed-ups via improper payments. Trade & Food Security: U.S. Wheat Associates signed a deal with Indonesia’s flour millers (APTINDO) to set minimum U.S. wheat purchase volumes through 2030. Health Policy: Indonesia moved to standardise cigarette packaging to curb youth smoking. Security & Procurement: Indonesian police are shopping for hi-tech Chinese equipment, including counterterror gear, drones, surveillance tools, and bomb disposal robots. Volcano Watch: Mount Lewotobi Laki-Laki eruptions forced airport closures and disrupted flights. Sports (Indonesia Open): Badminton headlines included Indonesia Open quarterfinals and exits, with Sze Fei-Nur Izzuddin reaching semis.

Volcano Disruption: Indonesia’s Mount Lewotobi Laki-Laki erupted again on Friday, sending ash about 2.5 km high and forcing Maumere airport to suspend operations, disrupting five domestic flights. Currency Shock: The rupiah slid to a record low above IDR 18,000 per US dollar as energy costs bite and lawmakers passed a bill expanding oversight of Bank Indonesia, raising fresh independence concerns. Free Meals Overhaul: Indonesia’s nutrition program is being reshaped for efficiency, with new kitchen construction paused, tighter standards, and a stronger push toward pregnant women, breastfeeding mothers, and children under five—especially in remote areas. Export Rules Clarity: Indonesia reaffirmed business certainty under its one-door export policy for strategic commodities, saying existing contracts can continue if they follow regulations and avoid under-invoicing. Energy Transition Update: Renewable energy’s share in the electricity mix hit 17.89% in April, topping the government target, as coal still dominates generation. Business & Tech: DayOne Data Centers closed a US$4.5b Series C, with Indonesia’s sovereign wealth fund among new investors, to expand capacity in Indonesia and the region.

Free Meals Crackdown: Indonesia’s free meal program is in turmoil after officials were arrested and the head was fired amid corruption and food-poisoning allegations, with the government pushing for tighter controls and a refocus toward more remote areas. Digital Identity & Fraud: Indonesia will require face biometrics for new mobile number registrations starting July 1, aiming to curb SIM-related fraud as OJK warns cybercrime and AI-enabled scams are rising. Rupiah & Markets: The rupiah slid to record lows near Rp18,000 per US dollar, driving stock selloffs and prompting Bank Indonesia market support. Energy & Commodities: Nickel supply is projected to face a deficit as Indonesia’s policy uncertainty and Iran-war disruptions affect production and sulfur supply. Regional Diplomacy: ASEAN and the US held talks in Jakarta on expanding cooperation ahead of the 50th anniversary of ASEAN–US relations. Humanitarian Update: Gaza hospitals, including the Indonesian Hospital, are severely damaged and many facilities are out of service, with access restrictions worsening care. Sports: Indonesia Open badminton saw major upsets and quarter-final spots set, with PV Sindhu eliminated by world No. 1 An Se-young.

Rupiah Shock: Indonesia’s rupiah slid past IDR18,000 per US dollar for the first time, dragging stocks and reviving fears of intervention as foreign investors sell off amid global risk-off sentiment. Central Bank Overhaul: Lawmakers passed a bill expanding Bank Indonesia’s mandate to include economic growth, while also widening oversight—sparking fresh debate about central bank independence. Corruption Crackdown: KPK detained Deputy Immigration and Corrections Minister Silmy Karim over alleged residency-permit corruption, as prosecutors widen a probe that also ensnared other immigration officials. Free Meals Probe: Indonesia arrested the dismissed head of the National Nutrition Agency tied to Prabowo’s free-meals program after corruption allegations and past food-poisoning complaints. OJK Powers: Parliament approved rules giving OJK authority to regulate and supervise Indonesia’s strategic minerals and commodities exchange. Energy & Industry: BP expects Tangguh LNG domestic deliveries to rise to 89 cargoes in 2026; Indonesia also plans commercialization of its first plasma fractionation plant, targeting full operations in 2027. Climate & Food: UN warnings and regional reports point to El Niño returning, with hot, dry weather already disrupting crop planting across Asia, including Indonesia’s palm oil areas. Sports: PV Sindhu was ousted at the Indonesia Open by Olympic champion An Seyoung; Satwik-Chirag retired mid-match due to injury. Legal/Travel: An Australian woman in Bali faces up to 20 years after being arrested for 59 ml of cannabis vape liquid.

Indonesia Politics & Justice: UN experts condemned Indonesia’s military trial in the acid attack case against human rights defender Andrie Yunus, urging a public civilian trial after the March 12 attack left him with severe, permanent injuries. Rupiah & Markets: Indonesia’s rupiah slid to about Rp17,966 per US dollar as officials said the central bank leads exchange-rate action, while markets react to tariff fears and speculation. US Tariffs Over Forced Labor: The Trump administration proposed Section 301 tariffs of 10% to 12.5% on 60 economies, including Indonesia, after forced-labor enforcement gaps—raising uncertainty for regional trade. Climate Watch: UN and WMO warnings point to El Niño returning, with higher odds of drought and extreme heat risks for Indonesia and other regions. Energy & Data Centers: Indonesia is pushing ahead with data-centre growth and power deals, while global debate intensifies over AI’s water and land footprint. Environment & Conservation: A rare Blue-fronted Lorikeet was reportedly rediscovered in Indonesia’s mountain forests after decades of near absence. Sports: Indonesia Open badminton action continued, with local players advancing amid injuries and withdrawals.