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Why the Rupiah is Sliding amidst Higher Growth

Monday, May 11, 2026

Indonesia’s economy is growing fast, but markets are unconvinced. Investors fear the boom is being bought with swelling deficits and mounting fiscal risks.

arsip tempo : 178044627678.

Illustration: Tempo/Gatot Pandego. tempo : 178044627678.

INDONESIA’s economy appears to be booming. Gross domestic product expanded 5.61 percent year on year in the first quarter of 2026. Yet financial markets delivered a starkly different verdict. On May 5, the same day the growth data was released, the rupiah plunged to a record low of Rp17,425 against the United States dollar.

At first glance, the contradiction seems baffling. How can an economy grow strongly while its currency collapses? In

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Yopie Hidayat

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