Food Inflation Triggers Price Hikes, Trade Balance Surpluses US$2.39 Billion: Prabowo's Priority Budget and Indonesia's Strategic BRICS Membership

The beginning of December 2025 is marked by significant developments in the macroeconomic sector, ranging from a consistent trade balance surplus to an increase in inflation nearing the end of the year. Concurrently, the long-term policy discourse is intensifying, covering the large allocation for the President-elect's priority programs and Indonesia's strategic move to join a new economic alliance. The main focus of these developments includes evaluating the trade surplus and inflation, as well as analyzing the impact of government spending policies and Indonesia's participation in BRICS on the national economic direction.

The Central Statistics Agency (BPS) recorded that Indonesia's trade balance in October 2025 reached a surplus of US$2.39 billion, which was supported by strong export performance. However, import performance in the same month was observed to weaken ahead of the Christmas and New Year (Nataru) period, which is attributed to a slowdown in domestic demand and the delay in importing raw materials for industries. Additionally, inflation in November 2025 hit 2.72 basis points (bps), with rising prices of red chili and rice being the main drivers, reflecting pressure on food prices towards the end of the year.

In facing these economic dynamics, Indonesia officially joined the BRICS economic alliance, and as an initial step, deposited funds amounting to US$1 billion into the New Development Bank (NDB). This strategic move indicates Indonesia's commitment to strengthening economic cooperation and global financing access.

Meanwhile, Economists assess that the budget for President-elect Prabowo Subianto's priority programs, which reaches Rp256.7 trillion, will not automatically drive economic growth. The effectiveness of these funds will highly depend on the speed and accuracy of allocation and the absorption capacity of spending on the ground.

The current macro data and policies carry diverse implications. The stable trade balance surplus provides a cushion for Rupiah exchange rate stability, but the weakening import indicates a slowdown in industrial activity and domestic demand. The year-end inflation increase, particularly from the food sector, creates pressure on people's purchasing power and requires government intervention. Policy-wise, the size of Prabowo's program budget creates a potential for a large economic multiplier effect, but requires strict governance to prevent it from becoming a fiscal burden. Meanwhile, BRICS membership and the NDB deposit open opportunities for diversifying infrastructure financing and enhancing Indonesia's geopolitical position.

Overall, the Indonesian economy enters the end of 2025 with a contrasting picture: a solid trade balance yet threatened by food inflation and sluggish domestic demand. The Government is now faced with the dual task of controlling food inflation through price stabilization, while ensuring the Rp256.7 trillion priority program budget can be effectively executed. The strategic step of joining BRICS demonstrates a proactive effort to secure future financing sources and economic cooperation.