2024 was marked by rapid developments affecting global economic dynamics with continued uncertainty in the global financial markets. Global political tensions, which were still high in early 2024 due to the ongoing Russia-Ukraine conflict, heightened further after Israel's attack on Palestine. Towards the end of 2024, the America First policy increased global uncertainty because this policy has the potential to dramatically change the world's geopolitical and economic landscape. Various developments related to the outcome of the US General Election have increased the risks of fragmentation of world trade and investment as well as lower global economic growth, whilst also leading to heightened uncertainty in the global financial markets. Global economic growth in 2024 is forecast to slow to 3.2% from 3.3% in 2023 and is projected to remain at 3.2% in 2025, and slow further to 3.1% in 2026. Divergence in growth patterns between countries persists along with increasing fragmentation of the global economy and trade. The US economy is forecast to remain buoyant in 2024 and 2025, albeit with the risk of economic overheating stemming from a widening fiscal deficit. Meanwhile, economic growth in China and the Eurozone is forecast to slow down further in line with weak domestic demand and the impact of the US government's trade tariff policies. Elsewhere, the economic growth prospects for India, Indonesia, and a number of Emerging Market Economies (EMEs) forecasted to remain upbeat, driven by solid domestic demand, albeit with potentially sluggish exports performance due to deteriorating global economic growth and fragmentation of global trade.
A number of international figures and institutions made statements concerning the severity of the global economic challenges faced in 2024. Statements by the leaders of the European Central Bank (ECB) and the International Monetary Fund (IMF), as well as official statements from the World Bank and the Bank for International Settlements (BIS), suggest that the global economy is still under pressure from slowing growth and persistent inflation, along with heightened geopolitical risks and economic fragmentation. Developing countries, including those in Asia, face challenges from weakening credit flows and uneven recovery prospects.
The national economy will face increasingly severe challenges in 2024 amidst persistent uncertainty in global financial markets. Global economic dynamics coupled with heightened geopolitical tensions have caused the risk premiums of bonds in developing countries to rise again along with greater volatility in global financial markets. As a result, there has been a reversal of foreign portfolio flows which led to the weakening of exchange rates in EMEs, including Indonesia. The impact of global uncertainty on the Indonesian economy calls for continued vigilance, especially in regard to rising commodity prices driven by supply chain disruptions, which may trigger inflationary pressures, erode household purchasing power, and affect fiscal stability and national economic growth. This vigilance was emphasised by Indonesia's Minister of Finance in the 2024 State Revenue and Expenditure Budget (APBN) press release. The severity of domestic economic challenges is also highlighted in various reports from international financial institutions, such as OECD Economic Surveys and the World Bank's Indonesia Economic Prospects in 2024. Similar concerns were also expressed in the 2024 Indonesian Economic Report by the Central Bureau of Statistics (BPS) and the Indonesia Economic Outlook 2025 published by the University of Indonesia (UI).
In addition to global and national economic dynamics, Bank Indonesia is also closely monitoring the significant challenges posed by changes in the strategic environment, which require strengthening its policy framework and institutional capacity as both a central bank and a public institution. This includes the implementation of the Financial Sector Development and Strengthening Act (P2SK Act), which reinforces Bank Indonesia's authority in regulating and developing the money and foreign exchange market, managing foreign exchange flows and the digital Rupiah, as well as supervising interest rate and exchange rate derivative transactions. Granting Bank Indonesia greater authority needs to be followed up through the issuance of mandated regulations and their gradual implementation. Furthermore, good synergy is needed between the central bank's policy mix - particularly monetary and macroprudential policies - and fiscal policy, real sector policy, and financial system stability policy to ensure national economic growth momentum in the face of a global economic slowdown. In addition, synergy in the digitalisation of the national economy and financial system play a crucial role in promoting inclusive economic growth and anticipating risks, including those stemming from rising cyber threats and attacks in the financial sector. These significant challenges - arising from the global, domestic, and internal strategic environment - require care in formulating policy responses, including the continued need to foster policy coordination among the authorities to safeguard stability and support national economic growth.
Although global financial market uncertainty remained high and there were significant economic challenges on the domestic front, Indonesia's economic performance was nonetheless resilient in 2024. Indonesia's economic growth reached 5.03% (yoy) in 2024 and is projected to remain within the range of 4.8% to 5.6% in 2025. As a result, Bank Indonesia continues to optimise its policy mix to maintain stability and, at the same time, also support sustainable economic growth. Amidst heightened global uncertainty, the Rupiah exchange rate has remained under control, supported by Bank Indonesia's stabilisation policies. Even though the Rupiah exchange rate remained under pressure at the end of 2024, the pace of Rupiah depreciation was still less than that of other emerging market currencies. At the same time, price stability was maintained, as reflected in the Consumer Price Index (CPI) inflation rate of 1.57% (yoy) in December 2024 - well within the target range of 2.5% ±1%. Bank Indonesia continues to optimise its pro-market monetary instruments, namely Bank Indonesia Rupiah Securities (SRBI), Bank Indonesia Foreign Exchange Securities (SVBI), and Bank Indonesia Foreign Exchange Sukuk (SUVBI) - to support Rupiah exchange rate stability and ensure inflation remains within the target range.
Furthermore, credit and financing continue to play a vital role in supporting economic growth, whilst ensuring continued resilience of the financial system. Credit growth reached 10.39% (yoy) in 2024, with working capital loans growing by 8.35% (yoy), consumer loans by 10.61% (yoy), and investment loans increasing by 13.62% (yoy). Sharia financing and Micro, Small, and Medium Enterprises (MSME) lending also grew, up by 9.87% (yoy) and 3.37% (yoy), respectively. Financial system resilience remained solid, supported by adequate banking liquidity, high capital adequacy ratios, and manageable credit risk. Bank Indonesia will continue to strengthen policy coordination with the Financial System Stability Committee (KSSK) to mitigate various risks that could potentially disrupt financial system stability.
Digital economic and financial transactions continue to exhibit positive growth, supported by a secure, efficient, and reliable payment system, an increasingly robust industry structure, and sound infrastructure. In 2024, BI-RTGS transactions grew by 17.6% (yoy), BI-FAST transaction volume increased by 62.4% (yoy), mobile application-based transactions rose by 39.1% (yoy), and QRIS transaction volume recorded rapid growth of 191.8% (yoy). In respect to currency management, the amount of Currency in Circulation (UYD) grew by 9.3% (yoy) or in line with the brisker economic activity. Going forward, Bank Indonesia will continue to accelerate the adoption of digital payment systems and ensure the adequate availability of fit-for-circulation Rupiah currency across the entire territory of the Republic of Indonesia, including the Frontier, Outermost, and Remote (3T) regions.
Bank Indonesia's policy mix response – that is closely aligned with the national economic policy mix - has been key to maintaining solid national economic performance. In response to the rapidly changing global economic and geopolitical dynamics in 2024, Bank Indonesia has consistently focused its policy mix on strengthening economic stability and supporting sustainable economic growth, reinforced by close synergy with the national economic policy mix. In this regard, at the beginning of 2024, monetary policy was directed toward maintaining stability (pro-stability). Nevertheless, since September 2024, monetary policy has shifted toward a more balanced stance of maintaining stability (pro-stability) whilst also supporting economic growth (pro-growth). Meanwhile, macroprudential policy and payment system policy, supported by initiatives to deepen the money and foreign exchange markets (PUVA), various MSME and Islamic economic and financial development programs, as well as international policy measures, remain focused on promoting economic growth (pro-growth).
Interest rate policy is determined in a forward looking and pre-emptive manner to ensure the two year inflation forecast remains within the target range at each Monthly Board of Governors Meeting (RDG). In 2024, the Monthly Board of Governors meetings decided to raise the BI Rate by 25 bps to 6.25% in April, then lower it to 6.00% at the September meeting, and keep it unchanged until the end of the year. These decisions were consistent with Bank Indonesia's monetary policy stance which is aimed at keeping inflation within the 2.5 ± 1% target range for 2024 and 2025, taking into account the stability of the Rupiah exchange rate and the need to support sustainable economic growth. Meanwhile, accommodative macroprudential measures - such as liquidity incentives to spur bank lending/financing, the digitalisation of the payment system, and other policies - were strengthened further to foster sustainable economic growth in line with the Asta Cita program.
Throughout 2024, Bank Indonesia continued to improve coordination with the Government and other partners - including supporting the Asta Cita program - amidst significant challenges on both the global and domestic economic fronts and the demands of implementing the mandates of the P2SK Act. Bank Indonesia's policy synergy and coordination with government policies are pursued through five main agendas, namely: (i) strengthening macroeconomic and financial system stability; (ii) boosting domestic demand, particularly consumption and investment; (iii) increasing economic productivity and capacity; (iv) accelerating deepening of the financial sector to spur financing in the economy; and (v) accelerating digitalisation of the payment system and the national digital financial economy. In addition, Bank Indonesia continues to work more closely on policymaking with the Financial System Stability Committee (KSSK) to ensure financial system stability. Concurrently, Bank Indonesia is also pursuing greater international cooperation in central banking, including on payment system connectivity and local currency transactions, as well as facilitating investment and trade promotion in priority sectors in collaboration with relevant agencies.
In 2024, Bank Indonesia continued to strengthen its transformation to build a credible, professional, well governed, accountable and transparent central bank, amidst the evolving dynamics of policy and institutional strategic environment. In the policy area, the transformation of Bank Indonesia is carried out by strengthening the framework of monetary, macroprudential, and payment system policies in line with the mandate of the P2SK Act through the issuance of the Bank Indonesia Regulation on the Bank Indonesia Policy Mix (BKBI). Bank Indonesia also launched the Indonesian Payment System Blueprint (BSPI) 2030 and the Money Market Deepening Blueprint (BPPU) 2030, whilst also strengthening the legal foundation related to monetary policy, foreign exchange reserve management, PUVA policy, monetary control, and Alternative Dispute Resolution Institution in Financial Sector (LAPS-SK), including Bank Indonesia's data and information policies.
Aside from the refinement of frameworks and regulations, Bank Indonesia's transformation is also focused on various efforts to optimise the implementation of monetary, macroprudential and payment system policies, as well as supporting policies. In the area of monetary policy, the transformation is directed toward optimizing the implementation of integrated pro-market monetary operations (OM) to develop the money market and foreign exchange market (PUVA), as well as to support efforts to attract portfolio inflows through the issuance of Bank Indonesia Rupiah Securities (SRBI), Bank Indonesia Foreign Exchange Securities (SVBI), and Bank Indonesia Foreign Exchange Sukuk (SUVBI). Monetary operations transactions through primary dealers have been initiated to support the development of a modern and advanced PUVA, and to improve the effectiveness of monetary policy transmission. In the macroprudential area, transformation efforts are focused on strengthening synergy and coordination across authorities in order to help maintain financial system stability, in accordance with the mandate of the P2SK Act. The development of Supervisory Technology (Suptech) is being carried out continuously, based on a roadmap to enhance suptech data collection and data analytics which, in turn, should facilitate the creation of agile and responsive macroprudential supervision in meeting the challenges arising from the implementation of Bank Indonesia's policy transformation.
In the payment system sector, transformation in payment system infrastructure development is focused on strengthening the
stability, scalability, and synergy of
retail and wholesale payment system infrastructure. In 2024, the implementation of BI-FAST continued apace with the introduction of three new services, namely bulk transfers, request for payment, and direct debit transfers. Furthermore, strengthening of the payment system industry structure was carried out through the reorganisation of activities, participation in payment system infrastructure, and the interlinking of Payment System Service Providers (PSPs) based on the criteria of Transaction, Interconnection, Competence, Risk Management, and Technological Infrastructure (TIKMI). As an important step to support the digital payment system ecosystem, Bank Indonesia undertook various initiatives, such as expansion of the QR Code Indonesian Standard (QRIS) between countries, digitalisation acceptance and literacy campaigns, holding digital innovation competitions under BI Hackathon, and developing innovative features and instrument services on payment channels, including the Indonesian Credit Card (KKI) government segment Online Payment Virtual Card Tokenisation feature and QRIS Tap Near Field Communication (NFC). Bank Indonesia's commitment to strengthening cross-border payment system connectivity has been realised through expanding Regional Payment Connectivity (RPC) cooperation with the central banks of South Korea, the United Arab Emirates (UAE), Japan, India, and China. In addition, Bank Indonesia is currently developing a concept for Indonesia's involvement in the development of the Nexus Phase 4 Project and continuing exploration and experimentation related to the development of the Digital Rupiah as part of the Garuda Project.
Meanwhile, transformation in the area of supporting policies in 2024 was pursued through the development of PUVA, which focuses on matters relating to the product, pricing, participants, and infrastructure (3P+1I). This objective was pursued through the development of Repo instruments, Domestic Non-Deliverable Forward (DNDF) and PUVA products based on Sharia principles, as well as instigating reforms to strengthen the national interest rate benchmark by ending the publication of the Jakarta Interbank Offered Rate (JIBOR) effective as of 1 January 2026. Efforts to develop PUVA continued to be strengthened through the launch of the PUVA Central Counterparty (CCP), evaluation of the implementation of PUVA primary dealers, and enhancement of APUVINDO's role as Bank Indonesia's strategic partner in PUVA.
In the institutional area, Bank Indonesia's transformation focuses on three strategic areas, namely organisation and business processes, human resources and business culture, as well as digitalisation. Amidst changes in the strategic environment that require improvements to several frameworks -including further regulation of the implementation of the P2SK Act and a shift in employee demographics whereby most employees fall into either the Generation Y or Z categories - institutional transformation is directed at maintaining institutional credibility through sound and professional governance. To strengthen organisational support which is consistent with the mandate of the P2SK Act, Bank Indonesia established its Strategic Business Plan (RBS) in 2024 for the 2025–2030 period and defined the key provisions of the Institutional Policy Mix (BKK). Meanwhile, the transformation of human resources and business culture is being carried out through various efforts focused on strengthening leadership, developing new capabilities - particularly digital capabilities - and strengthening the employee value proposition (EVP). Furthermore, the digital transformation agenda in 2024 was focused on the development of a digital business platform, data center development, improvement of technology infrastructure capabilities, and the use of data and artificial intelligence (AI) in analysis.
Despite the challenging global and domestic economic conditions in addition to the demands of implementing the mandate of the P2SK Act, Bank Indonesia recorded strong performance in 2024, with Key Performance Indicators (KPIs) exceeding their targets. Bank Indonesia's achievements came on the back of various transformation initiatives and policy responses, with stakeholders recognizing the progress made, as exemplified by a number of awards received at both the national and international level. These milestones are a concrete manifestation of consistent policy implementation, continuous innovation, and solid coordination between Bank Indonesia and the Government (including the relevant ministries and institutions) – ultimately having a significant impact on the economy of Indonesia.
In the area of monetary policy, Bank Indonesia has kept core inflation at a low level of 2.26% (year-on-year) and maintained a stable Rupiah exchange rate in the face of rising global uncertainty. Although the Rupiah came under pressure at the end of 2024, its rate of depreciation was still less than that of several other countries' currencies. Indonesia's foreign exchange reserves remained buoyant at USD 155.7 billion. Cooperation between Bank Indonesia and the Government in the fiscal-monetary area was increasingly close in 2024 and included efforts to mitigate the negative spillover effects of global developments.
Bank Indonesia successfully achieved all Key Performance Indicators (KPIs) in the macroprudential area, with results surpassing the 2024 targets. Bank lending growth reached 10.39% (year-on-year) in 2024, inclusive financing through the Macroprudential Inclusive Financing Ratio (RPIM) reached 33.55%, and banking liquidity remained sound as indicated in the high ratio of Liquid Assets (LA) to Third Party Funds (TPF). Close synergy within the Financial System Stability Committee (KSSK) and with other authorities, including cross-authority coordination in the financial sector, continues to be strengthened to support the resilience of the national financial system.
In the area of payment systems, Bank Indonesia's success in achieving various KPI targets has already helped to boost performance of the national payment system. The digitalisation of payment services continued apace, supported by the availability of stable payment system infrastructure. Transactions through BI-FAST, RTGS, and the use of QRIS in 2024 showed significant growth. In addition, cross-border QRIS transactions continued to grow in line with efforts to strengthen cross-border payment system connectivity. In terms of Rupiah currency management, throughout 2024, Bank Indonesia was able to meet the demand for Rupiah currency across all regions of the Republic of Indonesia, including in frontier, outermost, and remote (3T) areas, while maintaining the quality and soil level of the currency. These achievements were also underpinned by close cooperation with partners in the digitalisation of the national economy and finance. Throughout 2024, various efforts to hasten the digitalisation of payment instruments and channels in addition to the expansion of the Digital Economy and Finance (EKD) ecosystem helped 90.7% of regional governments (495 local governments) to reach the Digital stage.
Meanwhile, the achievement of KPI in the area of supporting policies reflects Bank Indonesia's strong commitment to promoting deepening of the financial market, inclusive and sharia economic-financial development, as well as enhancing international cooperation. The deepening of PUVA showed solid progress with increased market volume and liquidity which improved monetary transmission, Rupiah stability and liquidity management, supported by pro-market instruments and bilateral platform integration with the CCP (Central Counterparty). Further efforts to improve the competency of market participants were taken through professional certification and adherence to a code of ethics. There was also an increase in Sharia financing, in line with the growth of PUAS (Sharia Open Market Operations) transactions, while the empowerment of MSMEs and sharia business players was strengthened by organizing KKI, FESyar, IN2MF, and ISEF. Consumer literacy and empowerment also increased significantly.Meanwhile, KPI achievements for international policy were also above target, as reflected in the higher share of local currency usage in international trade and the increasingly strategic role of Bank Indonesia/the Republic of Indonesia in various global cooperation forums.
From the institutional perspective, Bank Indonesia consistently carries out its duties and exercises its authority based on the principles of good governance and professionalism. This is reflected in the achievement of KPI targets maturity in governance, risk management, and internal audit, which surpassed the 2024 targets. Bank Indonesia received an Unqualified Opinion from the Audit Board of the Republic of Indonesia (BPK) on its 2023 Annual Financial Statements (LKTBI). In 2025, Bank Indonesia also received an Unqualified Opinion for its 2024 LKTBI, marking the 22nd consecutive occasion Bank Indonesia has received an Unqualified Opinion since 2003. In addition, the Central Information Commission (KIP) bestowed Bank Indonesia with the title of 'Informative Public Institution' in 2024. Bank Indonesia's commitment to integrity and governance also earned it recognition from the Corruption Eradication Commission (KPK), which ranked Bank Indonesia at the highest level in the 2024 Integrity Assessment Survey (SPI). Furthermore, adequate organisational support and capable human resources (HR) were provided commensurate with the institution's strategic needs. Asset management was carried out optimally with good governance and a process integrated end-to-end. From a regulatory perspective, the adequacy of regulations as the legal basis for the implementation of Bank Indonesia's duties and the exercise of its authority has been met in accordance with the mandate of the P2SK Act.
