By Stefanno Sulaiman and Gayatri Suroyo
JAKARTA (Reuters) -Indonesia’s economic growth this year will likely stay around 5% despite trade tensions, its finance minister said on Thursday, stressing a government delegation was still negotiating terms with Washington to try to avoid high tariffs.
The minister’s outlook is roughly the same growth pace as last year’s 5.03%. The government’s target is 5.2% this year and President Prabowo Subianto has pledged to lift growth to 8% by 2029.
In its latest world economic outlook, the IMF downgraded Indonesia’s economic growth estimate for 2025 to 4.7% from 5.1%.
Sri Mulyani Indrawati’s remarks came at an online press conference of Indonesia’s stability board, which consists of its finance minister, central bank governor, head of financial services authority and head of deposit insurance corporation.
The minister and Bank Indonesia Governor Perry Warjiyo were in Washington to attend IMF-World Bank meetings.
A delegation led by chief economic minister Airlangga Hartarto was also in the U.S. capital trying to conclude trade talks within 60 days since its April 17 meetings with U.S. officials including the U.S. Trade Representative.
In those meetings, Indonesia has offered to buy more American products, such as liquefied petroleum gas and wheat, as well as cut its own non-tariff barriers so that the United States would not apply a 32% tariff on Indonesia’s exports, which include electronics, apparel and footwear.
"The government will actively conduct early mitigation, including communicating with the U.S. government and, as instructed by the president, will continue deregulation efforts to reduce trade barriers," Sri Mulyani said.
"Efforts will also continue to protect domestic demand," she added.
Indonesia’s financial markets have been hit by capital outflows since President Donald Trump’s announcement of hefty tariffs in early April. Sri Mulyani said the rupiah’s movements against the U.S. dollar are expected to be stable.
In a separate statement, Minister Airlangga said his team has officially begun technical negotiations with U.S. counterparts for a framework agreement on tariffs and would soon discuss topics like market access and national tariff estimates.
"The USTR has stressed the importance of a final package for President Trump’s consideration as the final decision maker," the Indonesian economic ministry said.
Sri Mulyani said she is scheduled to meet with U.S. Treasury Secretary Scott Bessent later this week.
She had met with Chinese finance minister Lan Foan on the sidelines of the IMF-World Bank meetings, during which they agreed to strengthen ties, Sri Mulyani said.
Sri Mulyani has previously estimated that if the United States keeps its planned 32% tariff for Indonesia, it could reduce growth potential by 0.3 to 0.5 percentage points.
Indonesia’s exports to the U.S. account for just about 2% of its gross domestic product, the government has said, but fallout from the trade war could hurt its economy more.
During their trip, Indonesian ministers also met with U.S. business people to discuss tariffs, including executives of mining giant Freeport McMoRan and the US-ASEAN Business Council’s chief executive, Ted Osius, according to the ministers’ social media posts.