The latest economic expert survey conducted by the university of Indonesia's Institute for Research on Economics and Society (LPEM) has presented a pessimistic outlook for the Indonesian economy.

Following rumours of the resignations of Indonesia’s minister of finance, Sri Mulyani and coordinating minister of economics, Airlangga Hartarto, the Jakarta Stock Exchange Composite Index (JCI) plunged over 7%, prompting a temporary 30-minute trading halt before closing 6.1% lower at 6,076 points, its lowest level in three years.

Indonesia’s Presidential Palace has since denied these claims, denouncing the reports of Sri Mulyani’s resignation as false claims.

RHB Sekuritas Indonesia analyst Andrey Wijaya notes: “Despite this clarification, market volatility is expected to persist in the medium term due to ongoing policy uncertainty and ineffective government communication, which have negatively impacted investor sentiment.”

Additionally, the latest economic expert survey conducted by the Institute for Research on Economics and Society (LPEM) has presented a pessimistic outlook for Indonesia’s economy.

Widjaya adds: “The upcoming extended Lebaran (Eid) holiday from late March to early April may also lead investors to move their portfolios into cash, further influencing market dynamics.”

He concludes: “Although the JCI is currently trading at relatively low valuations and offering attractive dividend yields, creating potential buying opportunities, investors are likely to remain cautious and wait for clearer policy direction from the government.”

The JCI had closed at 6,223.39 points on March 18, down 248.56 points and 3.84% for the day.