Jakarta (ANTARA) – Bank Indonesia (BI) has called for stronger coordination between fiscal and monetary policies to safeguard national economic stability and sustain domestic growth amid escalating global uncertainty and financial market volatility.Speaking at a virtual press conference on Wednesday, BI Governor Perry Warjiyo stated that global market tensions have resurfaced following a renewed escalation of the conflict between the United States and Iran in early July 2026.”Traffic in the Strait of Hormuz has been disrupted again, affecting production and trade supply chains between countries, and the price of oil and various global commodities has rebounded,” Perry said.BI projects global economic growth to remain sluggish at 3 percent in 2026, while global inflation is expected to rise to around 4.5 percent. This inflationary pressure has prompted tight monetary policy stances internationally, with the US Federal Reserve anticipated to raise the Fed Funds Rate in early Q4 2026.In the bond market, yields on US Treasuries rose sharply on July 20, 2026, reaching 4.56 percent for 10-year notes and 4.18 percent for 2-year notes, driven by a widening US fiscal deficit.The resulting global capital outflows from emerging markets toward US safe-haven assets have significantly strengthened the US dollar against both developed and emerging market currencies.Despite these global headwinds, Perry affirmed that Indonesia’s economic foundation remains solid, driven largely by robust domestic demand.Second-quarter economic activity was bolstered by strong public consumption, supported by civil servant salaries and social assistance disbursements, alongside stable household spending cushioned by food aid, transit subsidies and vocational programs.Investment was primarily anchored by construction projects linked to the National Priority Work Program (PKPN), though private investment requires further encouragement. Across sector, growth was sustained across manufacturing, construction, transportation and warehousing.To mitigate ongoing external risks, the central bank confirmed it will align its monetary, macroprudential and payment system strategies closely with government programs to maintain stability and foster long-term growth.”Bank Indonesia estimates that Indonesia's economic growth in 2026 will remain strong, in the range of 4.9 percent to 5.7 percent,” Perry concluded.