Macroeconomic Landscape
Global economic signals in mid-2025 remained mixed. The US kept interest rates steady as inflation eased slightly, while the Eurozone lowered rates amid subdued spending. China maintained growth but faced cooling momentum in industrial output and retail demand. In Indonesia, Q1 growth reached 4.87% year-on-year, supported by festive consumption, but quarterly contraction and weaker confidence hinted at ongoing domestic challenges.

Market and Policy Developments
Indonesia’s stock market rebounded over 20% by late May, led by Basic Materials, Energy, and Transportation. Bank Indonesia cut rates to 5.5% and eased liquidity rules, aiming to support recovery. However, slower retail sales, a widening fiscal deficit, and falling tax revenues reflect caution beneath the surface. Bond yields remained stable, with short-term instruments offering more opportunity.

Insurance and Investment Highlights
The insurance sector is under pressure, particularly in credit lines with rising loss ratios. Higher interest rates are straining balance sheets, prompting shifts toward shorter-term and lower-risk assets. Despite rate cuts, demand for credit-linked products stays muted. With global trade tensions escalating, insurers are watching export-reliant sectors closely and adjusting pricing to manage rising risks.