The escalating Israel–Iran conflict, with risks of U.S. involvement and potential closure of the Strait of Hormuz, threatens global energy supply chains and increases geopolitical and commodity market volatility.

The U.S. economy shows sectoral divergence, with resilient services and labor markets offset by weak manufacturing; persistent inflation and global risks are prompting the Fed to hold off on further rate cuts.

The Eurozone began its monetary easing with a June rate cut, but sluggish growth, uneven recovery, and vulnerability to external shocks may limit the pace of further accommodation.

China’s recovery remains fragile as manufacturing activity slows and consumer sentiment softens, with lingering structural issues like property sector weakness and trade tensions dampening medium-term prospects.

Indonesia’s 2025 growth was downgraded to 4.7% by the OECD, reflecting weak domestic demand, falling retail sales, and continued contraction in manufacturing, though low inflation allows room for policy support.

Trade and fiscal pressures are mounting in Indonesia, with April’s sharp drop in trade surplus and falling coal and CPO exports weighing on revenue, prompting reallocation toward key government programs.

Bank Indonesia paused rate cuts in June amid capital outflows and external risks, though reserves remain strong at USD 152.5 billion and external stability is supported by improving investment position.