- The decreasing short-term political uncertainty encourages portfolio inflows from the shorter end to the longer and riskier end of the Indonesian financial market.
- The post-election rally in asset valuations appears to be short-lived given limited improvements in the domestic macroeconomic condition.
- Limited improvement in households’ consumption and liquidity conditions justified the government’s decision to realise its social spending. However, higher yields may make it more costly for the government to continue expanding its fiscal commitments.
