US Economy : The U.S. economy showed signs of resilience in early 2025, although underlying pressures remain. The Fed maintained its policy rate at 4.25%-4.5% amid concerns that tariff-related inflation may persist longer than initially projected, despite growing downside risks to employment. GDP growth slowed to 2.4% (year-on-year/yoy) in Q4 2024 from 3.1% (yoy) in the previous quarter, with consumer and government spending remaining primary drivers. Manufacturing PMI dipped below the expansion threshold, and services growth weakened, pointing to softening demand.
China Economy : Sustained its economic recovery momentum in Q1 2025, with GDP growing 5.4% (yoy) — the strongest pace in 18 months. The expansion was led by robust activity in manufacturing and high-tech industries, while fixed asset investment rose 4.2% (yoy) to reach USD1.4 trillion
Euro Economy: Show mix of cautious optimism alongside persistent structural headwinds. The ECB cut key interest rates by 25 basis points (bps), citing progress toward its 2% inflation target and easing wage pressures. Retail activity improved, with sales rising 2.3% (yoy) in February, indicating consumer activity. Labor market conditions tightened further, with unemployment edging down to 6.1% (yoy).
Indonesia Economy : Bloomberg's latest analysis projects Indonesia’s economic growth to reach only 4.9% (yoy) in 2025, due to disruptions in the global economy as the impact of U.S. tariff. While Indonesia recorded a general inflation rate of 1.03% (yoy) after two consecutive months of deflation, however concerns over weakening purchasing power remain a challenges. For instance, growth Retail Sales Index (RSI) has slowed to 8.32% this year compared to 9.32% during the same period around Eid al-Fitr last year. Consumer pessimism is also persist. Nevertheless, the Eid al-Fitr season has provided some positive momentum for Indonesia’s economy. Notably, Indonesia’s PMI outperformed those of several neighboring countries, supported by strong domestic manufacturing activity.
Sectoral Analysis: Several industries in Indonesia are currently facing challenges. In the information and communication sector, performance has weakened due to intense market competition and subdued purchasing power. In contrast, the mining sector has benefited from the recent surge in gold prices. However, nickel prices have been trending downward since peaking in May 2024. The property sector is grappling, primarily driven by affordability as critical issue. Meanwhile, the healthcare sector is set to undergo a significant transformation in 2025 with the implementation of KRIS (Kelas Rawat Inap Standar).
Asset allocation outlook: Upcoming US Tariff policy has increased the market uncertainty and volatility, from global market equities perspectives negative prices return persist on March 2025. Significant sell-off also happened in all markets except gold. However, domestically JCI Index began to recover in March 2025. Tightening domestic liquidity has increase rate, except for SRBI. Forward looking, volatility is expected to remain high, especially in global markets, after the announcement of the U.S. reciprocal tariff, both the equity and bond markets remain prone to foreign outflows.
