Global Economic Outlook Weakens Amid Oil Price Surge and Tightening Monetary Policy

Bank Indonesia's Governor Destry Damayanti expressed concerns over the global economic outlook, citing high financial market uncertainty. Oil prices have surged due to the renewed escalation of the war in the Middle East, with prices reaching as high as $132 per barrel before falling back below $100 on September 22, 2026.

The increased oil prices are not an isolated issue, as various world commodities have also seen price hikes. Damayanti stated that global economic growth is expected to remain weak at around 3.0 percent in 2026, accompanied by rising inflationary pressure of approximately 4.6 percent.

Additionally, the US monetary policy interest rate has increased to 3.75-4.00 percent in September 2026, with a possibility of further hikes. This tightening of global monetary policy has led to an increase in the yield of US Treasury bonds and a strong US dollar against developed and emerging markets.