JAKARTA – Citigroup is predicting a robust performance for Indonesian equities next year, with the Jakarta Composite Index (IHSG) forecasted to breach the 9,000 level. The financial giant is favoring a selection of stocks ranging from the consumer to the banking sectors.
Analysts at Citigroup Inc. project the IHSG to surge approximately 10% next year, reaching an unprecedented high above the 9,000 mark. This optimistic outlook for Indonesian stock prices is primarily fueled by anticipated government spending and a likely reduction in interest rates. Specifically, Citi analysts Helmi Arman and Rohit Garg highlighted in their research that a 10% increase could propel the IHSG to 9,250, up from its current standing around 8,363.
As reported by Bloomberg on Tuesday (11/11/2025), Citi analysts stated, “Government spending plans are expected to significantly boost economic growth.”
The IHSG has already demonstrated impressive resilience, strengthening by approximately 18% year-to-date and repeatedly achieving new all-time high (ATH) levels. Just last week, the index set a fresh record, climbing to 8,394.59.
IHSG: Can its Record-Breaking Run Continue Until Year-End?
Looking ahead, improved liquidity and reduced funding costs are poised to invigorate the banking sector. This revitalization is expected to manifest in robust credit growth and healthier profit margins for financial institutions.
Citi further elaborated that a faster realization of government spending and enhanced social subsidies are anticipated to stimulate household consumption. This surge in consumer activity is set to significantly benefit prominent consumer and retail issuers such as PT Sumber Alfaria Trijaya Tbk. (AMRT) and PT Mayora Indah Tbk. (MYOR).
Additionally, analysts noted that leading banks including PT Bank Syariah Indonesia Tbk. (BRIS), PT Bank Negara Indonesia Tbk. (BBNI), and PT Bank Rakyat Indonesia Tbk. (BBRI) are well-positioned to capitalize on a favorable lower interest rate environment.
Despite the persistence of structural challenges, Citigroup analysts affirmed that “a confluence of improving liquidity, a stronger fiscal multiplier effect, and resilient domestic demand will collectively foster highly supportive conditions for Indonesian stocks.”
In stark contrast to the buoyant stock market, the Indonesian rupiah has experienced a significant downturn, depreciating approximately 3.5% against the US dollar year-to-date. This performance has unfortunately positioned the rupiah as Asia’s worst-performing currency.
This weakening trend in the rupiah is attributed to several factors, including recent interest rate cuts, ongoing concerns surrounding the central bank’s independence, and investor anxieties regarding Indonesia’s overall fiscal outlook.
Citigroup analysts further predict that the rupiah will likely remain under pressure in the near term. This forecast stems from Bank Indonesia’s perceived prioritization of economic growth over exchange rate stability, coupled with anticipated headwinds to the trade balance following incidents at the Freeport-McMoRan Inc. mine.
Sumber Alfaria Trijaya Tbk. – TradingView
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Summary
Citigroup predicts the Jakarta Composite Index (IHSG) will breach the 9,000 level next year, potentially reaching 9,250, fueled by anticipated government spending and likely interest rate reductions. The IHSG has already shown robust performance, strengthening by approximately 18% year-to-date and repeatedly setting new all-time highs. This positive outlook for Indonesian equities is attributed to improving liquidity, a stronger fiscal multiplier effect, and resilient domestic demand.
The financial giant favors specific stocks across banking and consumer sectors, with PT Bank Syariah Indonesia Tbk. (BRIS), PT Bank Negara Indonesia Tbk. (BBNI), and PT Bank Rakyat Indonesia Tbk. (BBRI) positioned to benefit from a lower interest rate environment. Consumer and retail issuers like PT Sumber Alfaria Trijaya Tbk. (AMRT) and PT Mayora Indah Tbk. (MYOR) are also expected to gain from stimulated household consumption. Conversely, the Indonesian rupiah has significantly depreciated by 3.5% year-to-date, making it Asia’s worst-performing currency, and is expected to remain under pressure due to various economic factors.