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Bisnis-Himawan L Nugraha
Economic Council Optimistic That Trump's Tariffs Will Not Shake Indonesia Like The 2008 Crisis
Wednesday, 16 Apr 2025
The National Economic Council (DEN) believes that the reciprocal tariffs imposed by U.S. President Donald Trump will have minimal impact on the national economy. DEN member Chatib Basri elaborated that exports contribute 22.18% to the Gross Domestic Product (GDP) in 2024, a figure he considers relatively small. Chatib, commonly referred to as Dede, compared this with other countries, noting that Singapore's export contribution to GDP is 180%, while Vietnam's stands at 78%. "Our exports to America account for 10%. Therefore, in terms of GDP, this translates to 10% of 22%, which is 2.2%. Even in the worst-case scenario, the impact of Trump's tariffs would be 2.2% of GDP," Dede stated during a discussion at The Yudhoyono Institute on Sunday, April 13, 2024.
According to his calculations, Indonesia's economic growth could still reach between 4.3% and 4.5% even under the adverse effects of Trump's tariffs. He acknowledged that these tariffs would also influence the global financial markets; however, he maintained that the uncertainty in global financial markets would not significantly affect the domestic bond market. He pointed out that foreign ownership of government-issued bonds is only about 14%, a figure that is considerably lower than during the 2008 global financial crisis. "When President SBY was in charge during the global financial crisis, I must say that the situation was much more challenging than what we are facing now, and at that time, Indonesia's economy still managed to grow by 4.6%," Dede explained. Similarly, DEN Vice Chair Mari Elka Pangestu indicated that they have conducted several models to assess the impact of Trump's tariffs on the domestic economy. "For Indonesia, all models indicate a relatively low impact, approximately between 0.3% and 0.5% on our growth," Mari Elka remarked during the same event.
