AmCham Update Vol. 6 #125

Sluggish Loan Growth despite Big Cash Infusion, $2.6 billion Deal for Pertamina at G20 Summit, Crackdown on Illegal Foreign Labor, EV Production Rising, Microplastic Air Pollution found in Major Indonesian Cities

Nov 24, 2025

Loan Growth Stagnant Despite Liquidity Injection

Loan growth in Indonesia has remained stagnant despite the government injecting Rp 200 trillion (US$12 billion) into state banks in September to boost economic activity.

Finance Minister Purbaya Yudhi Sadewa told a press conference on Nov 20 that “the full impact of the increased liquidity will take about two to three months [to materialize], from the moment the money is injected.” Earlier projections anticipated a one-month time horizon before the impact would be felt.

One of Purbaya’s first actions when he took over the post was to move Rp 200 trillion of cash reserves out of Bank Indonesia (BI) and into five commercial state banks as a way spur credit growth. The funds must be used exclusively for loans. Purbaya said the banks can use increased lending to pay for the interest owed to the state on the funds.

BI said on Nov 19 that loan growth in October was only 7.3 percent year-on-year, down from September’s 7.7 percent. Loan growth has hovered around 7 percent since June. In 2024, the average was 11.6 percent and that was during an election year, a typically cautious period for businesses.

Purbaya said the reasoning behind the liquidity injection was “simple cash management” and to activate funds that were sitting idle in BI.

Purbaya deposited a further Rp 76 trillion of government reserves with banks on Nov 10. “I think [loan growth] will get close to double digits [in December or January],” he said.

BI Governor Perry Warjiyo said on Nov 19 that weak loan growth was caused by the cautious stance of companies, which are holding back expansion. The central bank has cut its benchmark interest rate by 100 basis points so far this year but that also has yet to fully impact credit rates at commercial banks.

Andalas University economist Syafruddin Karimi told The Jakarta Post on Nov 21 that banks were facing a several problems – looming nonperforming loans, low credit demand and regulatory pressure. Households are also under pressure from regional tax increases, high living costs and increasing job uncertainty, he said.

“Under such circumstances, a big liquidity injection feels like pouring water into a tub with a clogged drain,” Syafruddin said.

Related Links:

Pertamina Grabs $2.6 billion Deal at G20 Summit

State-owned energy company Pertamina secured $2.6 billion in upstream oil and gas investment agreements on the sidelines of the G20 Summit, Coordinating Minister for Economic Affairs Airlangga Hartarto said during a virtual press briefing from Johannesburg, South Africa, on Nov. 22.

Airlangga confirmed the signing of a memorandum of understanding (MoU) but declined to name the participating companies, citing continuing negotiations. “These are ongoing discussions between Pertamina and its partners. That is all we can share for now,” he said.

The development follows Pertamina’s 2023 MoU with South Africa–based Guma Group, also valued at $2.6 billion, to explore projects in Kenya, Tanzania, Mozambique and South Africa.

Airlangga said Indonesia also drew interest from several African countries outside the G20. Angola expressed interest in cooperation on coffee and cocoa, while Ethiopia sought collaboration on palm oil-related agriculture. Delegations from both countries are expected to visit Indonesia.

Beyond energy and agriculture, the Indonesian delegation reported opportunities in digital and defense sectors. Finland expressed interest in data center and telecommunications cooperation, while state-owned explosives manufacturer Dahana signed an MoU with German defense firm Rheinmetall to develop an industrial explosives facility.

Vice President Gibran Rakabuming Raka, who led Indonesia’s delegation, underscored the importance of inclusive global economic growth and improved access to financing for developing countries through debt relief, innovative instruments, and green financing. He highlighted Indonesia’s QRIS cross-border payment initiative and encouraged continued G20 engagement on artificial intelligence.

Related Links:

Manpower Ministry Cracks Down on Illegal Foreign Labor

The government has imposed more than Rp 7 billion ($419,000) in fines on companies employing foreign nationals without proper permits, Minister of Manpower Yassierli announced on Nov. 20. The penalties stem from 18 verified reports submitted through the Ministry’s newly launched complaint platform, Lapor Menaker.

Since its debut on Nov. 12, the platform has received 884 reports, of which 814 have been verified. Yassierli described the system as an “essential instrument” for monitoring compliance with labor rules. “These initial two-week statistics give us valuable insight into current workplace compliance and will strengthen enforcement going forward,” he said.

The ministry said complaints also covered issues related to labor relations, wages, safety standards, working hours and social security obligations.

A major case involved an international manufacturing company in Banten, which was fined Rp 588 million for employing 583 foreign workers without the required Foreign Worker Utilization Plan (RPTKA). The violation prompted a province-wide inspection by local labor officials.

“Under Law 13/2003 on Manpower and Government Regulation 34/2021, every company employing foreign workers must secure RPTKA approval and provide proper protection. This is what we are enforcing,” Yassierli said.

Labor groups said the government’s regulatory simplification, such as abolishing the Expatriate Employment Permit (IMTA) and replacing it with the RPTKA, may have been exploited by non-compliant companies.

"The scope for violations is evident in the discrepancy between the RPTKA and actual implementation. Companies can also continue to employ foreign workers without reporting job changes or substitutions. This indicates a supervisory issue," said Andriko S. Otang, Advisor at the Trade Union Rights Center. He said some foreign workers misuse tourist visas to enter Indonesia and then work in local industries.

Said Iqbal, President of the Labor Party, argued that the drive to simplify procedures for investors risks weakening protections for Indonesian workers and limiting knowledge transfer.

Related Links:

EV Capacity Growing in Indonesia, Attracting $346 Million in Investment

Indonesia’s electric vehicle (EV) industry is enjoying steady growth, with total investments in electric vehicles of all kinds, from buses to motorcycles and passenger cars, reaching Rp 5.77 trillion ($346 million), according to the Industry Ministry.

Setia Diarta, Director General for Metal, Machinery, Transportation Equipment and Electronics at the Ministry, said each segment of the domestic EV industry is recording strong growth as Indonesia builds a greener manufacturing base.

“Across all three EV product categories – electric buses, electric cars, and electric two- and three-wheelers – we are seeing rapid development, with total investment reaching Rp 5.77 trillion,” Setia said at the opening of Gaikindo Jakarta Auto Week (GJAW) on Nov 21.

Setia said Indonesia’s electric bus manufacturers now have an annual production capacity of up to 4,100 units, supported by around Rp 380 billion in investment. Domestic manufacturing of electric passenger cars has a capacity of 110,660 units per year, backed by Rp 4.23 trillion in investment, he said. Electric two- and three-wheelers have an annual production capacity of 2.51 million units and total investment of Rp 1.16 trillion.

The automotive sector, including EVs, is a vital driver of national manufacturing, Setia said. In the third quarter of 2025, the transport industry contributed 1.28 percent to Indonesia’s gross domestic product.

“The rapid development of the national EV industry reflects the Indonesian government’s commitment to building an environmentally friendly and sustainable industrial ecosystem,” Setia said.

Meanwhile, a recent PwC report, Electric Vehicle Readiness (eReadiness) 2025, tracing the EV market in six ASEAN countries, concluded that Indonesia is one of the countries that shows the best EV performance, even though the conventional vehicle market is in a slump. "In the midst of the contraction of the Indonesian automotive market by minus 11 percent in the third quarter of 2025, electrification moved in the opposite direction," said Lukmanul Arsyad, PwC Indonesia Industrials and Services Leader, in a statement on Nov 20.

Related Links:

Microplastic Air Pollution Found in Major Indonesian Cities

Microplastics are fast becoming a health scourge worldwide, and Indonesia is not immune, with new research finding that the air in major Indonesian cities is contaminated with microplastics.

The study, conducted by the Ecological Observation and Wetlands Conservation Foundation (Ecoton) in collaboration with the Society of Indonesian Environmental Journalists between May and July 2025, examined air quality in 18 cities across the country – all had microplastic contamination.

Samples were analyzed to identify the types of microplastics present, and not surprisingly, dense urban centers are at the greatest risk, with Central and South Jakarta recording the highest concentrations, with 37 and 30 microplastic particles collected during a two-hour sampling period, respectively.

Jakarta was followed by Bandung (16 particles), Semarang (13), Kupang (13), Denpasar (12) and Surabaya (12).

The analysis found several types of plastics in the air. PTFE, often used in nonstick cookware and electrical insulation; epoxy, which is found in adhesives and coatings; and polyisobutylene, commonly used in tires and sealants, were all detected.

Sofi Azilan Aini, Ecoton’s microplastic research coordinator, said the main source of airborne microplastics is the widespread burning of plastic waste, which accounts for 57 percent of contamination.

“Poor waste management has forced many people to burn trash, which significantly contributes to microplastic pollution,” she said in a recent press briefing.

Despite being banned under Law No. 18/2008 on Waste Management, open burning is still common. Sofi explained that previous international studies show that burning plastic releases microplastic particles and synthetic aerosols that can remain in the air and travel hundreds of kilometers. When these particles interact with water vapor in the atmosphere, they can fall with rain, creating the phenomenon now known as microplastic rain.

Microplastics can enter the nose and trigger a prolonged inflammatory response, potentially causing tissue damage, pulmonary fibrosis, and changes to epithelial cells, Ecoton said in its report.

Related Links:

AmCham Cares – Danaher

Empowering Healthier Aging: A New Era in Alzheimer’s Care

Imagine a future where Alzheimer’s screening is as routine as a mammogram—an empowering step that gives patients and families the knowledge to act early and improve quality of life. This vision is closer than ever, thanks to breakthroughs in diagnostics and treatment.

From routine blood-based tests to precision treatments, innovation is transforming how we approach cognitive health. Discover how Danaher is leading the way to empower healthier aging for all.

Changing the narrative

For decades, society has accepted cognitive decline as inevitable. A 2024 World Alzheimer Report survey revealed that 80 percent of the public and 65 percent of healthcare professionals believe dementia is normal with age. While mild forgetfulness can be typical, dementia is not. Early diagnosis and intervention can significantly slow progression and preserve independence.

The Alzheimer’s treatment landscape is evolving rapidly. Beyond lifestyle changes, we now have targeted therapies, similar to breakthroughs in oncology, enabled by AI-driven insights into disease biology. These therapies require precise diagnostics to identify the right treatment for each patient, monitor effectiveness, and accelerate drug development. The goal: the right therapy at the right time for better outcomes.

Making testing accessible

Innovation must prioritize accessibility. Advanced diagnostics are only impactful if they’re available where patients receive routine care. That’s why the industry is investing in non-invasive, blood-based tests for neurodegenerative diseases. Recent milestones, such as Beckman Coulter’s FDA Breakthrough Device designation and collaborations like Washington University-Beacon, signal that affordable, routine Alzheimer’s screening is on the horizon. These tests promise earlier detection, less stigma, and greater patient empowerment.

Empowering, not frightening

Information should inspire action, not fear. By designing diagnostics that consider patient experience, access and agency, we can transform Alzheimer’s from a story of inevitable decline into one of proactive choices and hope. As Julie Sawyer Montgomery, EVP at Danaher, emphasizes: “Information we cannot act on instills fear. But information that empowers action is medicine at its finest.”

CLICK HERE TO READ THE FULL ARTICLE

Now is the Time to Join AmCham!

We offer a full slate of meetings, events, and information for our community. But we can only do this through the support of our members. If you are not yet an AmCham member please join now.

AmCham Indonesia is open to all companies with an interest in US business relations and we have many non-American members.

We are a community and we welcome you!

Reach us at [email protected] or click below!

JOIN AMCHAM

Update is AmCham’s regular newsletter on developments related to investment, the economy, regulations and issues related to doing business in Indonesia. It comes out three times a week. It is edited by AmCham Managing Director Donna Priadi and written by the AmCham Staff

See All Events

InvestmentReport

See All Reports See AmCham Update

Twitter Feed

Tweets by TwitterDev

Video Gallery

Photo Gallery