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BI calls for stronger fiscal-monetary coordination

Antaranews.com July 22, 2026

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calls for stronger fiscal-monetary coordination BI calls for stronger fiscal-monetary coordination July 22, 2026 16:51

GMT+700 Screenshot - Bank Indonesia (BI) Governor Perry Warjiyo virtually delivers a press statement detailing the

outcomes of the BI Board of Governors' Meeting for July 2026 on Wednesday (July 22, 2026). (ANTARA/Rizka Khaerunnisa)

Jakarta (ANTARA) - Bank Indonesia (BI) has called for stronger coordination between fiscal and monetary policies to

safeguard national economic stability and sustain domestic growth amid escalating global uncertainty and financial

market volatility. Speaking at a virtual press conference on Wednesday, BI Governor Perry Warjiyo stated that global

market tensions have resurfaced following a renewed escalation of the conflict between the United States and Iran in

early July 2026. "Traffic in the Strait of Hormuz has been disrupted again, affecting production and trade supply

chains between countries, and the price of oil and various global commodities has rebounded," Perry said. BI

projects global economic growth to remain sluggish at 3 percent in 2026, while global inflation is expected to rise to

around 4.5 percent. This inflationary pressure has prompted tight monetary policy stances internationally, with the US

Federal Reserve anticipated to raise the Fed Funds Rate in early Q4 2026. In the bond market, yields on US Treasuries

rose sharply on July 20, 2026, reaching 4.56 percent for 10-year notes and 4.18 percent for 2-year notes, driven by a

widening US fiscal deficit. The resulting global capital outflows from emerging markets toward US safe-haven assets have

significantly strengthened the US dollar against both developed and emerging market currencies. Despite these global

headwinds, Perry affirmed that Indonesia’s economic foundation remains solid, driven largely by robust domestic

demand. Second-quarter economic activity was bolstered by strong public consumption, supported by civil servant salaries

and social assistance disbursements, alongside stable household spending cushioned by food aid, transit subsidies and

vocational programs. Investment was primarily anchored by construction projects linked to the National Priority Work

Program (PKPN), though private investment requires further encouragement. Across sector, growth was sustained across

manufacturing, construction, transportation and warehousing. To mitigate ongoing external risks, the central bank

confirmed it will align its monetary, macroprudential and payment system strategies closely with government programs to

maintain stability and foster long-term growth. "Bank Indonesia estimates that Indonesia's economic growth in

2026 will remain strong, in the range of 4.9 percent to 5.7 percent," Perry concluded. Related news:

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